From ETO to CTO

Evolve construction, through order fulfillment models.

We still deliver many buildings the way goods were once delivered before industrialization: as one-off solutions assembled through bespoke coordination.

Much of what follows depends on one shift: the movement from Engineer-to-Order (ETO) to Configure-to-Order (CTO). The need for that shift explains why offsite construction struggles to scale. It also explains why the Center for Offsite Construction (CfOC) focuses on the shared infrastructure needed for a different model.

In an Engineer-to-Order system, the client commits far upstream, before design has meaningfully begun. Each project begins close to a blank slate. Drawings are custom. Engineering is project-specific. Coordination is repeated. Validation often comes late, before materials can be fully procured or work can proceed with confidence.

In that sense, much of construction still works like a bespoke tailoring economy. Architects, engineers, contractors, and suppliers come together to solve each project as a unique case. This can produce thoughtful results. But it is slow to repeat, difficult to scale, and costly to validate.

In a Configure-to-Order system, the customer commits later. Buyers choose from catalogs of pre-engineered, pre-coordinated, and increasingly pre-approved elements that can be combined within a defined platform. Design does not disappear. More of it happens earlier: at the level of the platform, the product family, and the interface standard, rather than being reinvented in each transaction.

That is how many other industries deliver speed, reliability, and affordability. They do not wait for each sale to begin solving the product from scratch. They complete most of the thinking before the order arrives.

The diagram above maps this difference. The further left the customer-order point sits, the earlier financial risk is taken on, the more direct client involvement is required, and the more effort must be spent validating a unique solution. The further right the line moves, the more the transaction depends on prepared assets, stable supply chains, and clearly defined options.

This transition from ETO to CTO is a fundamental change. It is an industrial rewiring. In ETO, value comes from project-by-project problem solving under unique conditions. In CTO, value comes from organized platforms, dependable interfaces, and repeatable combinations that can respond quickly to need.

Customization remains in both models. What changes is where the work of decision-making lives.

The essays that follow expand this argument. What Modularity Really Means explains why modularity is not simply about factory production, but about interfaces that let parts and firms work together. Mated Physical & Social Technologies shows why physical products must be matched by legal, contractual, and institutional change. The remaining essays then explore what this shift means for system organization, industry coordination, installation logic, professional roles, sustainability, and the larger evolution of the building sector.

The movement from ETO to CTO will take time. It will require new legal structures, new measures of performance, and wider reliance on pre-agreed interfaces. But the pressure behind it is already here. Affordable housing demand suggests that we have drawn close to the limits of what bespoke delivery can produce. The next era of homebuilding will need more output from fewer workers through more organized systems.

Applying the Model to AEC: building the CTO marketplace

The Center for Offsite Construction does not reject customization. It asks a more disciplined question: where should customization happen, and where should it not?

A CTO marketplace depends on three conditions:

1. reusable product platforms,
2. shared interfaces,
3. software that links customer choice to production.

Together, these allow choice without forcing every project back to the beginning.¹

In practice, this means that builders do not redesign kitchens, bathrooms, or utility systems from scratch each time. They configure them from catalogs of validated products. A pod, for example, can be designed to work with a shared interface standard: a physical and digital specification that governs fit, performance, and compliance across many projects. What changes from job to job is not the underlying logic of the product, but the combination of prepared elements within a larger building.

This has consequences across the delivery chain. Developers gain speed and predictability. Designers continue to make meaningful decisions, but within a clearer solution space. Manufacturers gain the repeatability needed to improve quality and scale output. Regulators gain confidence when standards carry forward prior review. And end-users benefit from lower costs, shorter timelines, and products that can improve over time.

The pattern is familiar outside construction. A CTO system often includes:

• product catalogs built for repeatable manufacturing
• standard interfaces between products (for example, USB,)
• interoperable products shipped with clear installation instructions

Two common examples make the point visible. An IKEA kitchen allows a homeowner to create a distinctive composition from pre-designed parts and install them through a documented sequence. LEGO works in the same way. Many different outcomes are possible, but they depend on a stable interface, interoperable parts, and explicit rules of assembly.

This is what construction has often lacked. There is plenty of imagination. And plenty of effort. It needs shared rules of fit.

To help build that future, the CfOC convenes industry stakeholders to develop the shared infrastructure CTO requires. That includes common language, shared standards, and new platforms for regulation and exchange. Our Models of Delivery describe the larger transition from ETO to CTO. Our Research Roadmap translates that transition into a set of concrete, open-source projects.

A housing marketplace becomes more accessible when its rules are more visible. That is the larger aim. If communities have access to shared standards, interoperable products, and clearer pathways to delivery, they are better equipped to address housing needs with speed, confidence, and less waste. Together, we believe this shift can drop the cost of an affordable housing unit between 30%-35% before 2030.

1. Manufacturing configurations, legal structures, contractual tools, and project management tools. ↩︎