The construction industry is experiencing a pivotal moment, where rising costs and labor shortages demand a smarter, more integrated approach to building. Industrialized construction (IC) is rapidly changing how buildings are made. However, the term is often reduced to one word: prefabrication. Prefab alone is not a strategy; it’s a tactic.

The biggest misconception we see is that industrialization begins when fabrication starts. In reality, if you wait until manufacturing is underway to make key decisions, you’re already too late. 

A fully integrated IC operating model goes far beyond prefabrication. A genuine IC approach aligns productization, supply chain strategy and manufacturing from the very beginning of a project. It’s a holistic system where every decision is interconnected. Ultimately, the success or failure of an industrialized project hinges not only on technology but also on total organizational alignment.

IC is more than prefab

Regardless of the project type, the core challenges in our industry remain the same: hiring people fast enough to execute projects, managing labor costs and optimizing productivity. IC offers a tangible solution to these issues, but only if we understand what it really means.

For decades, the industry has discussed early planning and prefab. However, in the context of IC, early planning means defining the supply chain plans during estimating and preconstruction. If you don’t do this well, everyone feels the pain downstream.

To truly adopt IC, we must flip the script on how we view scope. Instead of asking “What can we prefab?” the question we are trying to get everyone to ask on every project is “What can’t we prefab, modularize or productize?”

If you ask what you can prefab, teams will look for the obvious wins and accidentally leave out the rest. However, if you start with the assumption that everything should be manufactured offsite, you force the team to look for the exceptions. This shift in mindset changes the trajectory of how you go about planning your projects.

IC stages 

To move from traditional prefabrication to true industrialization, we focus on four key stages: estimating, planning, execution and tracking. Within execution, we see the real drivers of IC:

VDC.

Supply chain.

Manufacturing.

Installation.

These elements must work in concert. When a lot of people refer to IC, they are thinking of manufacturing or what happens in the shop. However, if you wait until production starts to make decisions, it is already too late. The goal is to “change the news, not report the news” by making the decisions early that shape the outcome rather than reacting once production begins.

Productization: The foundation of repeatability

This is where productization comes in. Think of it this way: Major shipbuilders don’t redesign propulsion systems, hull sections and electrical backbones for every vessel. They design a platform and configure around it. Construction, by contrast, often treats every building as a one-off prototype. Industrialization treats it as a configurable platform.

Productization defines the repeatable systems a company builds and the standard components used to build them. Instead of sourcing whatever materials are available for each job, teams establish consistent assemblies and parts that support scalable manufacturing, supply chain stability and more predictable installation. When systems are standardized, crews spend less time figuring out how to build something and more time executing work efficiently.

By defining these standards, whether it is a specific assembly or a modular rack, we enable the supply chain to function efficiently. This is often referred to as design for manufacture and assembly. This means engineers are designing the building thinking about how things will be manufactured, assembled and modularized, not only installed.

Supply chain vs. purchasing

A distinct difference exists between a traditional purchasing department and a true supply chain strategy.

Transactional purchasing is like day trading: you buy what you need in the moment based on today’s price. A material is needed, a purchase order is issued and the transaction is complete.

Supply chain strategy operates more like portfolio management. Firms such as BlackRock don’t buy assets one at a time based on daily fluctuations. They plan allocations across time, manage risk exposure and optimize across an entire portfolio.

Construction supply chains must operate the same way. Instead of reacting to immediate needs, supply chain planning evaluates material lead times early, aligns purchasing decisions across multiple projects and secures critical components before production begins.

There’s a sweet spot on projects to make certain purchases. By identifying projects with similar timelines, contractors can align procurement windows and buy materials in bulk, improving pricing and reducing risk as an organization rather than treating each project as an isolated transaction.

Where implementation breaks down

The biggest obstacle to IC is organizational alignment. On large mega-projects, you might be hiring hundreds of people from different backgrounds. Everyone has their own perspective on how a building should be built. Getting everyone aligned to a specific execution philosophy is the hardest part.

We see implementation breakdown in a few common areas:

Treating manufacturing as downstream: If fabrication is brought in after design is complete, you limit your options. You could fabricate a fully assembled mechanical module only to discover it exceeds crane capacity, doesn’t clear the shaft opening or cannot be set because structural loading wasn’t validated early. Fixing those mistakes doesn’t happen cheaply or quietly. 

Lack of early planning: If you don’t define your prefabrication and procurement strategies during the project initiation, you create downstream pressure. When manufacturing is ready but long-lead materials have not been secured, the shop sits idle. Industrialization depends on flow. If the supply chain is not aligned early, the engine stalls. 

Supply chain failures: We’ve seen similar projects running in parallel and purchasing materials independently, missing the opportunity to bundle volume and lock in better pricing across the portfolio.

This is where stakeholder alignment matters most. IC doesn’t tolerate passive coordination. It requires deliberate integration by bringing engineering, purchasing, manufacturing and field leadership together early to synchronize execution before production begins.

How we adjusted our model

At Harris, as we’ve transitioned from a traditional prefab world to an IC delivery model, the main difference is intentionality.

We’re moving from simple spools, parts and pieces assembled together to big modules. On hyperscale data centers, what clients really care about is “Can you do repeatable modular?” We are talking about 20,000- to 50,000-pound modules that require heavy automation and state-of-the-art facilities, not a fab shop with outdated equipment.

To support this, we’ve formalized our productization standards and shifted to a lifecycle supply chain strategy. We’re also heavily focused on work packaging. You don’t want a work package that takes three months to install. It needs to be broken down into smaller chunks so you can track productivity and manage the workflow from the factory to the field.

Practical takeaways for contractors

For contractors looking to make this shift, the path forward involves tangible steps:

Start IC planning at the estimating stage: Don’t wait for fabrication to start. Define your manufacturing and supply chain strategy when you are pricing the job.

Standardize products: Define your repeatable components. You can’t scale chaos.

Move beyond transactional purchasing: Build a supply chain strategy that anticipates needs months in advance.

Invest in onboarding: You can have the best processes in the world, but if people don’t follow them, it doesn’t matter. We focus heavily on onboarding and often use essentially a buddy system to pair new hires with experienced team members who understand our philosophy and practices.

Industrialization doesn’t fail because of a lack of equipment or tools. It fails when early planning is neglected, and supply chain and manufacturing are treated as afterthoughts.

IC reflects an essential shift and necessary evolution of our industry. 

Embracing a what can’t we prefab, modularize or productize mindset allows teams to achieve greater efficiency and deliver consistent results at scale. 

Alejandro Saenz is the vice president of industrialized construction at Harris. With more than two decades of experience driving complex, mega-project delivery, Saenz focuses on industrialized construction, manufacturing integration and digital transformation — turning traditional, project-by-project delivery into productized, technology-enabled operations that scale nationally and globally.