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The Quiet Profit Killer: “When Factory Quality Slips Before It Ships”

Gary Fleisher on March 20, 2026

Second in a series on improving the Bottom Line by 1% and more (For a list of all the articles, go to the end)

Recently, a respected leader in the offsite industry made a comment on LinkedIn that should have stopped every factory owner and GM in their tracks: quality is slipping in some factories, and it’s showing up as major rework at the jobsite.

That’s not just a quality issue. That’s a profit issue. A reputation issue. A future pipeline issue.

Because once a builder or developer has to fix your work in the field—under pressure, under weather, and under budget—they don’t forget it. And they don’t forgive it easily.

This is the second article in our series on improving the bottom line of an offsite factory. And if there’s one place where profits quietly bleed out, it’s not in sales or marketing—it’s in avoidable mistakes that leave your factory and show up on someone else’s jobsite.

There are a thousand ways to improve quality. Let’s not boil the ocean.

Let’s start with five that are simple, often overlooked, and surprisingly powerful.

1. The “We Thought They Knew” Preproduction Trap

Most quality problems don’t start on the production line.

They start in preproduction—where assumptions quietly replace clarity.

Plans get reviewed, but not fully understood. Scope is “generally” agreed upon, but not specifically confirmed. Details that seem obvious to engineering never quite make it to the floor the same way.

And then production builds exactly what they think they’re supposed to build.

The fix isn’t complicated, but it requires discipline. Every project needs a short, structured internal kickoff before it hits the line. Not a long meeting—just a focused alignment between sales, engineering, and production.

What are we building? What’s different about this job? What could go wrong?

You’d be amazed how many problems disappear when everyone starts with the same picture in their head.

2. The Missing “Last Look” Before It Ships

Here’s a question every factory owner should ask:

When was the last time someone truly responsible for quality looked at the finished product before it left the building?

Not a quick glance. Not a checklist filled out in a rush.

A real, accountable “last look.”

Too many factories rely on in-line checks and assume everything downstream will be fine. But small misses—an unsealed penetration, a misaligned wall, a missing component—can slip through because no one owns that final moment.

A designated final inspection, with authority to stop a shipment, changes everything.

Not because it catches everything—but because everyone knows it exists.

And that alone raises the bar.

3. Production Speed vs. Production Rhythm

I’ve walked through enough factories to see this pattern over and over.

When schedules tighten, the instinct is to push harder. Move faster. Get more out the door.

But speed without rhythm is where quality starts to unravel.

Crews skip steps—not because they don’t care, but because they’re trying to keep up. One station hands off incomplete work to the next. Small errors stack up until they become big problems.

The better approach isn’t to slow everything down—it’s to stabilize the flow.

Balanced workloads between stations. Clear expectations of what “complete” looks like before handoff. And just enough breathing room to do it right the first time.

Because rework is always slower than getting it right.

4. The Silent Cost of “Almost Right” Materials

Not all quality problems come from labor.

Some arrive on a truck.

Substituted materials. Slightly off-spec components. Items that “should work” but don’t quite fit the way they’re supposed to.

And instead of stopping the line, teams adapt. They trim, force, adjust, and move on.

Until those small compromises show up later as callbacks, leaks, or failures in the field.

A simple but often overlooked improvement is tightening material verification before it hits production.

Not just checking that materials arrived—but confirming they’re the right materials for that specific job.

It sounds basic. It is basic.

And yet it’s missed more often than anyone wants to admit.

5. The Feedback Loop That Never Comes Back

This one might be the most expensive of all.

A problem happens on a jobsite. The set crew fixes it. The builder absorbs the frustration. Maybe someone sends an email. Maybe they don’t.

And the factory?

Moves on to the next job, never fully understanding what went wrong.

Without a tight feedback loop from the field back to the factory, the same mistakes repeat. Quietly. Consistently. Expensively.

Every factory should have a simple system to capture jobsite issues and bring them back into production conversations.

Not to assign blame—but to close the loop.

Because the job isn’t finished when it leaves the factory.

It’s finished when it performs in the field.

The Bottom Line Isn’t Complicated—But It Is Fragile

Improving factory profitability doesn’t always require new software, robotics, or a million-dollar investment.

Sometimes it requires tightening the small, human systems that quietly hold everything together.

Clarity before production. Accountability before shipment. Rhythm on the line. Discipline with materials. And real feedback from the field.

None of these are revolutionary.

But together, they are powerful.

Because every mistake that leaves your factory doesn’t just cost money—it costs trust.

And in this business, trust is a lot harder to rebuild than a wall panel.

Modcoach Observation

If this is something you’re seeing—or even quietly worrying about—in your factory, you’re not alone. Many owners and managers are dealing with the same challenges but aren’t sure where to start or who to ask.

If you’d simply like to understand it better, reach out to me at [email protected]. No pressure, just a conversation.

Other articles in this series:

When Developers and Builders Go Modular, the Learning Curve Is Steeper Than Expected

The Offsite Factory Warranty Loop That Never Closes

If you’d like to explore this further, contact me today.

Bill Murray, Co-Founder of Offsite Innovators

When Developers and Builders Go Modular, the Learning Curve Is Steeper Than Expected

Gary Fleisher on March 15, 2026

First in a series on improving the Bottom Line by 1% and more (For a list of all the articles, go to the end)

For many builders and developers, the idea of switching to modular construction sounds straightforward. After all, they already know how to build houses. How different could it be?

Quite a bit, as it turns out.

After working as a business development representative for several modular home factories before retiring, I discovered that one of the most time-consuming parts of my job wasn’t selling homes. It was explaining the modular process to builders who were new to it.

And if I skipped that “hand-holding” part of the process, chances were pretty good I’d never see that builder again.

The Hidden Complexity Behind a Modular Quote

When a builder receives a quote from a modular factory, it often looks deceptively simple. A price is listed for the modules, along with a few unfamiliar terms like FOB, transportation costs, and delivery schedules.

But that quote only tells part of the story.

A modular home leaves the factory mostly complete, but several critical steps still happen at the job site. Transportation, crane service, setting the modules, utility hookups, and final mechanical work all need to be coordinated carefully. Unlike traditional stick-built construction, where the builder manages everything piece by piece on site, modular construction splits the work between the factory and the field.

If a new-to-modular builder doesn’t fully understand where that dividing line falls, mistakes get expensive very quickly.

I’ve seen builders dramatically overpay for crane services because they didn’t know how modular sets are scheduled. Others paid far too much for MEP (mechanical, electrical, and plumbing) work simply because they hired contractors unfamiliar with finishing modular homes.

A Different World Than Traditional Building Supplies

Earlier in my career, I managed one of the largest construction lumber and building supply yards in Pennsylvania. We sold everything a builder needed—paint, trusses, shingles, toilets, drywall, cement, cabinets, you name it.

The builders who walked through our doors didn’t need anyone to explain how to use those materials or how to price them. They knew their business.

But when I joined my first modular home company about thirteen years later, I realized something surprising.

There was almost no training available for builders transitioning into modular construction.

By the time I reached my third modular factory, the company had introduced a class for new builders entering the modular world. I thought that might finally reduce the amount of explaining I had to do.

It didn’t.

The class mainly covered topics that were important to the factory—things like payment schedules, warranty policies, what FOB meant, and what happened if completed modules sat in the yard longer than ten days.

What builders really needed to learn was something else entirely: how the whole modular process works from start to finish.

Developers Face an Even Steeper Curve

Builders at least have construction experience. Many developers, however, approach modular construction from a very different background.

Some have never swung a hammer or shingled a roof. Their expertise is financing, land development, and project planning.

When developers attempt their first modular housing or commercial project, the challenges multiply quickly.

Everything that confuses a builder—freight costs, crane coordination, set crews, finishing crews, and experienced MEP contractors—becomes even more complicated for a developer.

Without guidance, it’s easy for a project budget to spiral out of control before the first module ever leaves the factory.

Why the Industry Still Needs a Guidebook

Over the years, several builders have asked me to help them decode modular factory quotes, estimate freight and crane costs, locate experienced set crews, and find contractors familiar with modular finish work.

More than once I’ve thought someone should write a book explaining the entire modular process.

But the reality is that every state has different building codes, every local jurisdiction has its own rules, and no two modular factories structure their quotes the same way. Trying to create a universal guide might be nearly impossible.

Still, the need for that knowledge remains.

Where Offsite Innovators Comes In

That’s one of the reasons my business partner, Bill Murray, and I created Offsite Innovators.

Instead of leaving builders and developers to figure things out through costly trial and error, we help them understand the modular process before they make those expensive mistakes.

A conversation with Bill can clarify things like:

• How to read and understand a modular factory quote
• What FOB actually means in real-world terms
• How to estimate transportation and crane costs accurately
• How to locate experienced set and finish crews
• How to find MEP contractors who understand modular construction
• How to avoid the common mistakes that derail first modular projects

For builders and developers who want to step into modular construction, that kind of clarity can save months of frustration—and sometimes hundreds of thousands of dollars.

The Next Logical Step

Modular and offsite construction are quickly becoming essential tools for addressing housing shortages and improving construction efficiency. More builders and developers will eventually make the transition.

But understanding the process is critical.

The factories know how to build the modules. The builders know how to manage projects. Developers know how to assemble land and financing.

Bringing those worlds together successfully requires something else entirely—a clear understanding of how modular construction actually works.

And sometimes, all it takes to get there is a conversation with someone who has already walked that road.

With over 80 years of combined experience my partner Bill Murray and I can help.  We have advised countless manufacturers on improving their bottom lines through proper identification of problem areas and implementing essential corrective systems and processes.  If you are serious about continuous improvement reach out to us via email.  We’ll schedule a brief phone call to explore the possibilities.  Contact Gary at: [email protected], contact Bill at:[email protected] We’ll respond promptly and schedule a brief call.

Other articles in this series:

The Offsite Factory Warranty Loop That Never Closes

The Quiet Profit Killer: “When Factory Quality Slips Before It Ships”

Great Ideas Are Everywhere in Offsite Construction—But Turning Them Into Successful Companies Is Another Story

Gary Fleisher on March 7, 2026

Every month in the offsite construction world, I hear about another promising new idea. Someone has developed an app that will streamline scheduling, a machine that promises faster panel production, or a digital tool that claims to simplify design coordination between factories and builders.

The process almost always starts the same way. One person—or maybe two or three partners—becomes convinced they’ve discovered the next breakthrough. They sketch out the concept, begin building a prototype, test an early version of their software, or casually run the idea past a few friends.

Then comes the moment when they decide it’s ready for the market.

And that’s where things often begin to unravel.

Not because the idea is bad. In fact, many of these ideas are genuinely innovative. The problem is that between the original spark of inspiration and the launch of the business, too many critical questions were never asked—and even more were never answered.

That’s where bringing in an advisor early in the process can make the difference between becoming another forgotten startup and building something that actually survives in the real world.

Advisor vs. Consultant: A Difference Most Startups Miss

Many entrepreneurs assume they need a consultant. Consultants are typically hired to solve a specific problem. They arrive with a defined assignment—optimize a process, write a marketing plan, redesign a workflow—and when the job is done, they leave.

An advisor plays a very different role.

Advisors aren’t there to execute tasks. They’re there to challenge assumptions. They ask uncomfortable questions, connect dots the founders didn’t see, and help bridge the gap between what the startup team knows and what they don’t yet realize they need to know.

In many cases, the advisor’s most valuable contribution is a simple but brutally honest observation:

“Your idea, as you envision it today, either won’t sell right out of the box—or it won’t scale.”

That kind of feedback can save years of frustration and hundreds of thousands of dollars.

1. The Industry Reality Check

Offsite construction is a specialized industry with its own culture, production methods, regulatory hurdles, and financial pressures. Many startups underestimate how different it is from traditional tech or manufacturing ventures.

An advisor with real industry experience can quickly identify whether a new product or system actually fits the way factories operate. What looks brilliant on paper may be completely impractical on a production line that already runs on razor-thin margins and tight schedules.

2. The Market That Doesn’t Exist Yet

Many startups build solutions for a market that should exist—but doesn’t.

An advisor forces founders to answer tough questions:

Who will actually buy this?
Who controls the purchasing decision?
And how long will it take before the industry is ready to adopt it?

Those answers often reshape the entire go-to-market strategy.

3. The Scalability Illusion

A prototype that works in a lab or on a single job site doesn’t automatically translate into something that can be produced, sold, and supported at scale.

Advisors frequently spot scaling problems early. Maybe the system requires too much customization. Maybe it depends on skilled labor that’s already in short supply. Or maybe the economics only work at volumes the startup may never reach.

Better to discover those issues before the company invests heavily in the wrong direction.

4. The Missing Business Model

This is one of the most common gaps I see.

Many founders focus intensely on the product but spend very little time designing the business around it. Pricing, support, distribution, installation, training, warranties—these aren’t small details. They determine whether the idea becomes a viable company or just an interesting invention.

An experienced advisor helps fill in these blanks before they become expensive mistakes.

5. The Network Gap

In offsite construction, relationships matter. Factory owners, developers, engineers, lenders, and code officials all play a role in whether a new idea gains traction.

Advisors bring more than opinions—they bring networks. A well-placed introduction can open doors that might otherwise remain closed for years.

This is one reason why platforms like Offsite Innovators exist: to spotlight emerging technologies and connect innovators with the people who can help move their ideas forward.

6. The Hard Questions Nobody Wants to Ask

Startup teams are usually optimistic by nature. That optimism is necessary—but it can also blind founders to serious weaknesses in their plan.

An advisor’s job is to ask the questions others avoid:

What happens if adoption takes five years instead of two?
What if the first factory says no?
What if your competitors copy the idea faster than you expected?

These questions aren’t meant to discourage founders. They’re meant to strengthen the idea before the real world starts testing it.

The Value of Experience

The offsite construction industry is filled with innovators, and new ideas are essential if we want to build housing faster, smarter, and more affordably.

But ideas alone don’t build companies.

The startups that succeed are usually the ones that bring experienced voices into the room early—people who have already seen what works, what fails, and what pitfalls lie ahead.

Through our work and the conversations we feature on Offsite Innovators, we regularly meet entrepreneurs with exciting concepts. Some are already on the path to success. Others simply need guidance to close the gap between inspiration and execution.

In many cases, the difference between an idea becoming another also-ran or becoming a real industry breakthrough comes down to one simple decision:

Did they bring in the right advisor early enough?

The Modcoach Observation

Great ideas are common in offsite construction. What’s rare are founders who are willing to let someone challenge those ideas before they go to market. The smartest innovators I’ve met aren’t the ones who believe their idea is perfect—they’re the ones who invite experienced advisors to poke holes in it until it becomes strong enough to survive the real world.

Gary Fleisher—known throughout the industry as The Modcoach—has been immersed in offsite and modular construction for over three decades. Beyond writing, he advises companies across the offsite ecosystem, offering practical marketing insight and strategic guidance grounded in real-world factory, builder, and market experience. 

[email protected]

Change Order Discipline

Gary Fleisher on March 3, 2026

The Quiet Profit Killer Nobody Wants to Talk About

There’s an old joke in factory management that goes something like this:

“We didn’t lose money on that job… we just didn’t make what we thought we would.”

Translation? Change orders.

Not the official, signed, documented, properly priced change orders. Those are fine. Those are business. I’m talking about the quiet ones. The “no big deal” ones. The “while you’re at it” requests. The internal changes that somehow never quite make it back to the accounting department.

And in an offsite factory, those little favors eat profit faster than bad lumber pricing ever could.

The $200 Decision That Costs $2,000

It usually starts innocently.

A builder calls sales and says, “Hey, can we just move that window over about a foot?”

Sales, wanting to keep the relationship warm, says, “Sure, that shouldn’t be a problem.”

By the time that “no problem” hits engineering, redraws begin. Framing layouts shift. Sheathing changes. Maybe a header changes size. Maybe it affects siding layout. Maybe it impacts a cabinet run. Nobody sends an invoice for engineering time. Nobody tracks the production delay when the module has to pause while drawings are clarified.

But the clock keeps running.

Multiply that by a dozen “small” adjustments on a project, and suddenly the margin you carefully built into the job is leaking out like air from a poorly sealed duct chase.

Internal Changes Are Even Worse

Now let’s talk about the changes nobody admits are changes.

Production decides to “improve” something mid-stream.
A supervisor swaps materials because “we had it in stock.”
Someone upgrades a component to avoid an argument.

No paperwork. No cost tracking. No pricing adjustment.

It feels helpful. It feels efficient. It feels like good customer service.

It’s not.

It’s uncontrolled scope creep inside your own walls.

The Lumber Myth

When lumber prices spike, everyone talks about it. It’s dramatic. It makes headlines. It’s easy to blame.

But in most factories I’ve walked through over the years, unmanaged change orders quietly cost more annually than lumber volatility.

Lumber might move 10% for a few months.

Undisciplined changes move your margin on every single house.

And because they’re scattered across engineering, purchasing, production, and field coordination, they’re hard to see. No one line item screams “We lost $180,000 here.”

It just shows up as, “We thought this job would do better.”

Discipline Doesn’t Mean Being Difficult

Change order discipline doesn’t mean telling builders “no” all the time.

It means:

Every change is documented.
Every change is costed.
Every change has a visible impact on schedule and production flow.

It also means sales and production are aligned before the promise is made—not after the drywall is hung.

Builders actually respect factories more when there’s clarity. When they understand that moving a window affects framing, sheathing, siding, trim, and sometimes transport. When you explain it professionally, most of them get it.

And the ones who don’t? They’re usually the ones costing you the most anyway.

A One Percent Story

If you’re looking for a full one percent added back to your bottom line, change order discipline is one of the fastest ways to find it.

No robotics required.
No capital raise needed.
No shiny software demo.

Just systems. Accountability. And the courage to stop giving away work because it feels polite in the moment.

In offsite construction, precision is our calling card. We talk about tolerances in sixteenths of an inch.

Maybe it’s time we applied that same precision to our margins.

Because in the end, the most expensive words in a factory aren’t “lumber went up.”

They’re “It’s just a small change.”

If you’d like to explore this possibilty for yourself, connect with me today.

Bill Murray, Co-Founder of Offsite Innovators

From Cool Innovation to Boring Execution: The New Reality in Offsite Construction

Gary Fleisher on February 26, 2026

For the past decade, the offsite and modular construction industry has lived in what I like to call the “cool innovation phase.” If you attended any conference, walked any trade show floor, or listened to any pitch, you heard the same words repeated over and over: disruption, robotics, AI, digital twins, automation, carbon neutrality, mass timber, platform housing. It was exciting. It was inspiring. And in many cases, it was necessary.

But something is changing. Quietly. Subtly. And in my opinion, permanently.

The industry is getting tired of hype.

Developers, lenders, investors, and even factory owners are beginning to ask a very different set of questions. Not, “How innovative is this company?” but instead, “How reliable are they?” That shift may not sound dramatic, but it will determine who survives the next decade and who becomes another case study in PowerPoint history.

The End of the Innovation Gold Rush

There was a time when simply being “innovative” could attract capital. A compelling vision, a sleek rendering, and a promise to transform housing were often enough to raise tens or even hundreds of millions of dollars. We’ve all seen those stories. Some of them ended well. Many did not.

The result is that investors and developers have become more cautious. They’ve been burned by delays, changing designs, and factories that never reached full production. Now they want proof, not promises. They want factories that can deliver on time, every time. They want predictable pricing. They want partners that will still be in business when the warranty period ends.

This is not a rejection of innovation. It’s a demand for execution.

Predictable Factories Beat Brilliant Factories

If you ask developers today what keeps them awake at night, you won’t hear concerns about whether a wall panel was built by a robot or by a skilled worker. What they worry about is whether the panels will arrive when the crane is scheduled. They worry about whether the factory can maintain quality at scale. They worry about whether the production schedule will align with financing deadlines.

Predictability has become the new innovation.

Factories that understand this are investing less in flashy demonstrations and more in process control. They are tracking production metrics. They are refining workflows. They are standardizing designs. They are focusing on throughput, not just technology.

It’s not glamorous, but it works.

Stable Partners in an Unstable Market

The volatility of the housing market has made stability more valuable than ever. Interest rates move. Projects stall. Funding disappears. A factory that relies on a handful of large projects can suddenly find itself with empty production lines.

Developers are now asking, “Who can weather a downturn?” They want partners with diversified pipelines, strong balance sheets, and disciplined management. They want companies that don’t change direction every six months.

In other words, they want boring.

Repeatable Outcomes Are the New Competitive Advantage

Offsite construction was always supposed to be about repeatability. Yet much of the industry still operates in a project-based mindset. Every project is unique. Every design is customized. Every process is adjusted.

That approach undermines the very benefits offsite construction promises.

The shift now underway is toward product thinking. Platform housing. Standardized components. Repeatable designs. This is not about eliminating creativity. It’s about building systems that allow creativity to exist within a predictable framework.

The companies that master repeatability will scale. The rest will remain trapped in small-batch production.

Measurable Profits Over Vision

There is also a growing focus on financial discipline. For years, many startups prioritized growth over profitability. That model is now under intense scrutiny.

Factory owners are asking tougher questions:

  • Where are our margins?
  • Which processes actually add value?
  • Which investments improve the bottom line?

Incremental improvement, not massive transformation, is becoming the dominant strategy. A one percent gain in productivity. A two percent reduction in waste. A three percent improvement in scheduling accuracy. These small gains compound into real profit.

It’s not exciting. But it is sustainable.

The Winners Will Be the Most Reliable

Here’s the truth that may make some people uncomfortable. The companies that win the next decade will not necessarily be the most innovative. They will be the most dependable.

They will:

  • Deliver on time.
  • Meet budgets.
  • Communicate clearly.
  • Maintain quality.
  • Build trust.

Innovation will still matter. But it will be judged by results, not headlines.

This shift mirrors what happened in other industries. Early innovators create awareness. Mature companies create stability. The offsite construction sector is entering that maturity phase.

The Opportunity Ahead

For those willing to embrace this change, the opportunity is enormous. There is still massive demand for housing. There is still a shortage of skilled labor. There is still pressure for sustainability and efficiency. Offsite construction remains one of the most powerful tools available.

But the winners will not be the loudest voices. They will be the quiet ones, consistently delivering projects while others chase the next big idea.

The industry does not need fewer innovators. It needs more executors.

And that, perhaps, is the most exciting development of all.

If you’d like to explore this possibilty for yourself, connect with me today.

Bill Murray, Co-Founder of Offsite Innovators

Abandoned Malls, Empty Offices, and the Housing Crisis: Are We Finally Connecting the Dots? – with video

Gary Fleisher on February 26, 2026

The View From My Windshield

For years, I’ve driven past empty malls, dark office towers, and logistics buildings that look like they’re waiting for something to happen. In many cities, they sit quietly on valuable land while local leaders hold meetings about the housing shortage. It’s almost surreal. On one side of town, families can’t find affordable housing. On the other side, millions of square feet of real estate sit idle. The obvious question is finally being asked: Why aren’t we turning these buildings into homes?

From Empty to Opportunity

The answer is that we are—slowly. The trend has a formal name: adaptive reuse. It includes converting offices, retail centers, warehouses, schools, hotels, and churches into housing. Since the pandemic, the number of projects has surged. Remote work left downtown towers half empty. E-commerce changed retail patterns. Some logistics space is now underutilized. Meanwhile, housing demand has only grown stronger. Developers, cities, and investors are now looking at these abandoned or underperforming properties as opportunities rather than liabilities. For the first time in decades, adaptive reuse has moved from being a niche experiment to a mainstream strategy.

Not a Silver Bullet

But before we start celebrating, let’s be honest. This isn’t a silver bullet. Some projects are wildly successful. Others stall, collapse, or never get past the feasibility study. The difference between success and failure is usually not the building itself—it’s the early decisions. When the layout, structure, and location align with residential needs, the results can be impressive. Downtown revitalization happens. Communities regain energy. Affordable and workforce housing is created faster than ground-up construction. But when those factors don’t line up, costs explode and lenders run for the exits.

Design Realities Nobody Talks About

One of the biggest challenges is that most buildings were never designed to be homes. Office buildings, for example, often have deep floor plates. That means the center of the building has little or no natural light, which is a problem when you want apartments. Structural columns may be spaced in ways that limit unit design. Mechanical systems need complete replacement. In some cases, it’s cheaper to tear the building down and start over. That’s not what city leaders want to hear, but it’s the reality developers deal with every day.

The Financing Wall

Financing is another major obstacle. Traditional lenders still view adaptive reuse as risky. Construction costs are harder to predict. Unexpected structural issues are common. Zoning and code barriers can stop a project long before the first permit is issued. Local politics, community opposition, and lengthy approvals add time and uncertainty. In an industry that already operates on thin margins, those risks can kill deals quickly. It’s no surprise that many announced projects never move forward.

Malls and Warehouses: The Next Frontier

And then there are malls and warehouses—the next frontier. Across North America, there are hundreds of underperforming shopping centers and large-format retail sites. Some have already been redeveloped into mixed-income housing, walkable communities, and neighborhood centers. These projects have the potential to create entire new districts rather than just apartment buildings. Imagine turning a failing mall into housing, medical services, childcare, retail, and green space. When done well, the results can be transformative.

Why It’s So Hard to Get Right

But here again, the reality is complicated. Many malls are located far from public transit. They were designed for cars, not people. Infrastructure upgrades are expensive. Schools, utilities, and transportation systems must be expanded. Community resistance can be strong. People who oppose density suddenly become experts in zoning, traffic studies, and environmental reviews. The same communities that demand affordable housing often resist the changes required to make it happen.

Momentum Is Building

Despite all of this, the momentum is real. Cities are offering tax incentives, zoning changes, and faster approvals. Public-private partnerships are becoming more common. Nonprofits and faith-based organizations are stepping in, unlocking land that has been underused for decades. The private sector sees opportunity. Investors see long-term value. And younger generations, who are struggling the most with housing affordability, are more open to creative solutions.

Where Offsite Construction Fits

This is where the conversation gets interesting for the offsite and production construction industry. Adaptive reuse projects demand speed, cost certainty, and risk reduction. They require precision planning, early collaboration, and strong integration between design and manufacturing. In other words, they demand the very strengths that offsite construction has been promising for years.

Yet many developers entering adaptive reuse have little understanding of offsite methods. They know land. They know finance. They know entitlement. But they often do not know how to evaluate factory-built solutions, when they make sense, or how to structure projects to take advantage of them. The result is missed opportunities. Projects that could be faster and more predictable remain stuck in traditional processes.

The Opportunity Hiding in Plain Sight

This disconnect may be one of the largest untapped opportunities in the industry today. Adaptive reuse is not just about recycling buildings. It’s about rethinking how housing is delivered. It’s about integrating design, engineering, and manufacturing from the beginning. It’s about reducing risk and improving outcomes. Most importantly, it’s about aligning incentives so that every stakeholder benefits.

A Bigger Lesson for the Industry

There is also a deeper lesson here. For decades, the housing crisis has been framed as a supply problem, a labor problem, a zoning problem, or a financing problem. The truth is that it is all of these at once. Adaptive reuse doesn’t eliminate those challenges, but it forces collaboration in ways traditional development often avoids. When a project requires coordination between public agencies, developers, manufacturers, and communities, the industry either evolves—or the project fails.

The Turning Point

The irony is that the solutions have been sitting in plain sight. Empty buildings are everywhere. The need for housing has never been greater. Technology and manufacturing capabilities have advanced dramatically. The question is no longer whether adaptive reuse can work. The question is whether the industry is willing to change fast enough to make it scale.

If the answer is yes, abandoned malls and empty offices may become symbols of a turning point in how we build and deliver housing. If the answer is no, they will remain what they are today—silent reminders that knowing what to do and actually doing it are two very different things.

If you’d like to explore this possibilty for yourself, connect with me today.

Bill Murray, Co-Founder of Offsite Innovators

You’ve Got to Kiss a Lot of Frogs at IBS Before Finding a Prince

Gary Fleisher on February 18, 2026

Every year I walk into IBS with the same optimism. This is the year, I tell myself. This is the year I’m going to sit in sessions that change how I think about housing, construction, and business. This is the year I’ll hear something so practical and useful that I’ll be scribbling notes like a college freshman the night before finals.

And every year, by lunchtime on day one, I’m wondering if there’s a quiet hallway where I can sit and regroup.

Don’t get me wrong. IBS has some outstanding speakers. But, as my fairy godmother used to say, “You’ve got to kiss a lot of frogs before you find your prince.” And at IBS, there are frogs of every shape, size, and PowerPoint color palette.

Let’s start with the first group. These are the speakers who know their product or service inside and out. They’ve built it, tested it, refined it, and in many cases, they genuinely believe it will help the industry. The problem is that their 30-minute session is really just a disguised sales pitch.

You know the type. The talk starts with “industry challenges,” moves quickly into “unique solutions,” and ends with a QR code and a special IBS discount. Halfway through, you realize you’re not attending an educational session. You’ve just walked into a live commercial.

The audience politely nods. Some even take notes. But deep down, everyone knows what’s happening. The real question is not whether the product works. The real question is whether anyone in the room will actually remember the session after their next cup of coffee.

The second group of speakers is much more passionate. These folks care deeply about their topic. Zoning reform. Workforce development. Sustainability. Missing middle housing. Pick a subject, and there is someone who has devoted years of their life to it.

These sessions can be inspiring, but they often turn into something else entirely. The Q&A portion becomes a stage of its own. Some audience members genuinely want answers. Others seem determined to test whether the speaker knows as much as they claim. It becomes less about learning and more about intellectual arm wrestling.

You can almost hear the mental dialogue. “Let’s see if this expert can handle my question.” Meanwhile, the rest of the audience just wants to know how to build a house faster, cheaper, and without losing their sanity.

Then we arrive at my two favorite types of speakers. And when I say favorite, I mean the ones that make me quietly exit the room before anyone notices.

The first is the scholar. This person has devoted decades to research. They have charts, graphs, and percentages for everything. They can tell you that 37.2% of homeowners prefer something over something else. Why 37.2%? Who knows? But it sounds impressive, and nobody questions it.

The problem is that by slide number six, the audience has mentally checked out. The room is full of builders, developers, and factory owners who haven’t had their second cup of coffee. They didn’t come to IBS for a graduate-level seminar. They came for ideas they can use on Monday morning.

The scholar, however, is in full stride. More charts. More graphs. More percentages. The audience nods politely while secretly wondering if there’s a donut break coming soon.

The final group is the one that fascinates me the most. These speakers include notes and credits for their facts and figures at the bottom of every slide. The font is so small you would need a telescope to read it.

Honestly, they could be quoting MAD Magazine, and nobody in the room would know the difference.

There’s something oddly comforting about this. It reminds me that in every industry, we sometimes take ourselves a little too seriously.

Now, before anyone sends me angry emails, let me say this. There are truly great presentations at IBS. Sessions that are engaging, practical, and memorable. Speakers who tell stories, share real experiences, and admit their mistakes. Those are the sessions people remember. Those are the ones that actually change behavior.

The common thread among the best speakers is simple. They don’t try to impress. They try to help.

They speak like real people. They use examples instead of percentages. They tell stories instead of showing charts. They focus on what the audience needs, not what they want to sell or prove.

And when you find one of those sessions, it feels like striking gold.

So next year, when you attend IBS, go in with realistic expectations. You will hear some sales pitches. You will see some charts that make your head spin. You will sit through at least one session where you question your life choices.

But if you’re patient, and willing to kiss a few frogs, you might just find a prince.

And that one session could make the entire trip worthwhile.

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With more than 10,000 published articles on modular and offsite construction, Gary Fleisher remains one of the most trusted voices in the industry.

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Rules or Results? The Building Code Debate Reshaping Construction

Gary Fleisher on February 9, 2026

Building codes exist for one fundamental reason: to protect people and ensure that the buildings they live and work in are safe, durable, and perform as intended over time. These codes shape every aspect of construction, from structural integrity and fire protection to energy efficiency and indoor comfort. Compliance isn’t optional—it’s essential to occupant safety, long-term building performance, and legal approval.

At a high level, building codes fall into two primary categories: prescriptive codes and performance-based codes. Both approaches are widely used by builders, architects, and modular construction factories, often side by side, depending on local regulations and project complexity. Understanding the differences between these two systems—and when each makes sense—is critical for anyone involved in construction today.

Prescriptive Building Codes

Prescriptive building codes are rule-based. They provide detailed instructions that specify exactly how a building must be constructed. These codes spell out approved materials, dimensions, installation methods, and minimum requirements. For example, a prescriptive code might dictate insulation thickness, fire-resistance ratings for assemblies, or specific fastening schedules.

Compliance under a prescriptive system is straightforward: follow the rules as written, and the project meets code.

Advantages of Prescriptive Codes

Prescriptive codes offer clarity and predictability. Builders know exactly what is allowed, which reduces guesswork and can speed up permitting and inspections. Because requirements are clearly defined, there is little room for interpretation, minimizing disagreements between builders and inspectors.

These codes are also based on long-established construction practices. They have been tested over decades and are familiar to most builders, inspectors, and manufacturers. For smaller or less-experienced builders, this familiarity can reduce risk and simplify project execution.

Challenges of Prescriptive Codes

The biggest limitation of prescriptive codes is their rigidity. Builders must follow the rules precisely, even when alternative materials or methods could perform just as well—or better. This lack of flexibility can stifle innovation, particularly when new technologies or construction systems emerge faster than code updates.

Prescriptive codes can also be overly conservative. Requirements designed for extreme conditions may be applied universally, even in milder climates, driving up costs without delivering proportional benefits. As a result, builders may be forced to use materials or assemblies that exceed what the project actually needs.

Performance-Based Building Codes

Performance-based building codes take a fundamentally different approach. Instead of specifying how a building must be constructed, they define what the building must achieve. The focus is on outcomes—such as energy performance, structural capacity, fire safety, or moisture control—rather than prescribed methods.

Under this system, builders and designers are free to choose the materials, systems, and construction techniques they believe will meet or exceed the required performance targets.

Advantages of Performance-Based Codes

Flexibility is the defining strength of performance-based codes. Builders can use innovative materials, advanced systems, and nontraditional construction methods as long as they meet the stated performance criteria. This freedom often leads to more efficient designs, cost savings, and faster adoption of new technologies.

Performance-based codes also align well with sustainability goals. Because they emphasize outcomes like energy efficiency and environmental impact, they encourage creative solutions such as high-performance envelopes, renewable energy systems, and advanced insulation strategies.

Another benefit is adaptability. Performance-based approaches allow designers to tailor solutions to local conditions—whether that means seismic resilience, extreme weather resistance, or climate-specific energy strategies.

Challenges of Performance-Based Codes

With flexibility comes complexity. Demonstrating compliance often requires engineering analysis, modeling, testing, or third-party verification. These steps can add time, cost, and uncertainty to the approval process.

Performance-based codes also introduce subjectivity. Inspectors and authorities must evaluate whether a proposed solution truly meets performance objectives, which can lead to differing interpretations. This uncertainty can be frustrating, particularly in jurisdictions with limited experience reviewing alternative designs.

Finally, performance-based compliance demands a higher level of technical expertise. Builders and designers must understand building science, engineering principles, and system interactions. For smaller firms or those without in-house engineering support, this can be a significant hurdle.

Builder and Modular Factory Preferences

Preferences between prescriptive and performance-based codes often depend on project scale, organizational experience, and regulatory environment.

Traditional builders—especially smaller operations—tend to favor prescriptive codes. The certainty and predictability reduce risk and simplify interactions with local inspectors. When margins are tight and resources limited, following a clear rulebook can be the safest path forward.

Modular construction factories, particularly those focused on innovation and efficiency, often prefer performance-based codes. These codes allow factories to optimize designs, integrate automation, and adopt advanced materials without being constrained by rigid specifications. A modular factory, for example, may achieve superior energy performance through system-level design rather than by strictly following prescribed insulation values or assembly details.

This flexibility can provide a competitive advantage, enabling factories to reduce waste, improve consistency, and deliver higher-performing buildings.

Countries Using Performance-Based Codes

Many countries now use performance-based codes either fully or as part of hybrid systems that combine prescriptive and performance elements:

  • Australia incorporates performance-based provisions in its National Construction Code, particularly for fire safety and energy efficiency.
  • New Zealand allows performance-based design, with a strong emphasis on seismic resilience and sustainability.
  • The United Kingdom uses performance-based requirements in areas such as fire safety and energy performance.
  • Canada applies performance-based approaches in its National Building Code, especially for structural and fire design.
  • European Union countries, including Sweden and the Netherlands, rely heavily on performance-based standards to support sustainable construction.
  • The United States, while still largely prescriptive, is gradually expanding performance-based options, particularly in green building and resilience-focused projects.

Looking Ahead

As construction technologies, materials, and delivery methods continue to evolve, both prescriptive and performance-based codes will remain essential tools. Prescriptive codes provide stability and consistency, while performance-based codes create space for innovation and improvement.

The challenge—and opportunity—for builders and modular factories is knowing when to rely on proven rules and when to push boundaries responsibly. The future of construction will depend on striking the right balance between certainty and creativity.

If you’d like to explore this further, connect with me today.

Bill Murray, Co-Founder of Offsite Innovators