Li Ting: Reshaping the Building Industry System with Industrialized Thinking — Some Thoughts on Promoting High-Quality Development of the Prefabricated Construction Industry

Introduction: Origins and Reflections

(1) Understanding the Situation: Why Must the Government “Forcefully Promote” It?

(2) Precise Efforts: The Key Is to Focus on the “Demand Side” Rather Than the “Supply Side”

(3) Grasping the Crux: Government Investment Projects Must Mandatorily Adopt the EPC Model and the Construction General Contracting Model

(4) Scientific Evaluation: Measuring Industrialization by the Degree to Which “Machines Replace Labor”

(5) Consolidating the Foundation: Forcefully Promoting the “One Model All the Way” BIM 2.0 Platform

(6) Achieving a Closed Loop: Upgrading from Pure Structural Modules to “Integrated Modules”

(7) A Shift in Thinking: Replacing “Project Thinking” with “Product Thinking”

(8) A Shift in Concept: Replacing Seismic-Resistant “Structures” with Seismic-Resistant “Mechanisms”

Conclusion: Summary and Call to Action

Recently, at the invitation of a provincial leader, Master Li Ting attended a special provincial government meeting on the development of the prefabricated building industry, chaired by that leader, and put forward his recommendations on the high-quality development of the prefabricated building industry.

His speech is as follows:

Respected leaders and experts:

The prefabricated building industry development that is the subject of our special study today is not only a technological revolution in the construction industry, but also an important lever for our province to implement the requirements of high-quality development and to advance new-type industrialization. Building on my earlier reflections, I would like to share a few views for your reference.

First, we must reach a consensus:Prefabricated buildings are the core of the modern construction industry system, and the government must be determined to promote them vigorously.

Some may ask,if it is such a good thing, why not let the market promote it spontaneously?This is precisely the reality we need to recognize clearly.

Under the traditional construction model, there exists a vast vested-interest group and a deeply entrenched “path dependence”. From the habitual drawing methods of design institutes, to the on-site workmanship of construction teams, to the established channels of material suppliers,the entire chain is thoroughly accustomed to the “cast-in-situ” model.

In particular, at present, our labor costs remain relatively low compared with developed countries and regions(mainland construction workers earn RMB 300-500 per day, whereas construction workers in Hong Kong earn as much as HKD 2,500 per day). Under this cost structure,the driving force of purely market-based means is severely inadequate. Relying on rising labor costs to force enterprises to transform would be too slow a process and too costly.

Therefore, we must leverage the institutional advantage of “concentrating resources to accomplish major undertakings,” and the government must become the primary driver of industrial transformation.

This is not market intervention; rather, in the early stage of industry cultivation, it is about using the “visible hand” of policy to move the “invisible hand” of the market.

In the past, when we advanced prefabricated building work, we tended to focus on construction contractors, assigning them tasks and setting targets. But in the field of prefabricated buildings, this is not enough.

Construction contractors are the supply side, the passive party; they can only “build according to the drawings.” If the drawings do not change, the contractor cannot use prefabrication even if it wants to.

Our core strategy must shift to the “demand side.”

First, focus on the project owner (the client). 

This is the party that funds and initiates the project.

We must incorporate prefabrication requirements, as hard-and-fast rules, into land transfer or allocation conditions and into planning and design conditions. They should become rigid constraints on project approval, just like plot ratio and greening rate.

At the same time, prefabrication requirements should be incorporated into design document review and, ultimately, into completion acceptance conditions.

This will make project owners aware from the outset that without prefabrication, a project cannot get off the ground or pass acceptance.

Second, focus on design entities. 

Design is the soul of engineering and the starting point of industrialized manufacturing.

We must require designers to practice “Design for Manufacture and Assembly” (DfMA). Any building scheme that is unsuitable for factory manufacture or inconvenient for on-site assembly should not be allowed to win the bid.

We should, as soon as possible, formulate depth requirements for prefabricated building design documents. Design drawings must not only look presentable, but also reach a depth at which factories can directly manufacture standard components from the drawings and sites can conveniently install them according to the drawings, and later operations can carry out repairs and replacements according to the drawings.Without a revolution in design, prefabrication is nothing but empty talk.

In industrialized construction, the greatest taboo is design and construction becoming “two separate skins”—that is, disconnected from each other.The design institute finishes the drawings according to the design codes and considers its job done, while the construction contractor often finds the drawings difficult to build once it receives them—this is a chronic problem of the traditional model.

The key to solving this problem is model innovation. We require that government investment projects must mandatorily adopt the EPC general contracting model or the construction general contracting model.

The EPC model bundles design, procurement, and construction together, and the general contractor must consider issues from the perspective of overall optimization.

Under the construction general contracting model (integrated investment, construction and operation), the general contractor embodies the investor, the builder and the operator all in one, and its returns come from long-term operation.This is the highest form of industrial integration.

To save money, to shorten the schedule, and to reduce on-site hassles, it will naturally choose the most reasonable industrialization scheme.This forces design to take construction into account and construction to be involved in design, truly achieving the integration of design and construction.

It can be said that promoting EPC general contracting and construction general contracting is like grasping the “bull by the nose”—the crux—of prefabricated building development.

In the past, when we assessed prefabrication, we often looked only at the “prefabrication rate,” which easily led to superficial measures taken merely to meet the required ratio.

I suggest that we establish a more rigorous assessment system that better reflects the essence of the industry, whose core is the degree to which “machines replace labor.”

Specifically, we can add two quantitative indicators:

1. Factory-based production rate: 

that is, the output value completed on factory production lines as a percentage of the project’s total output value. This indicator directly reflects the depth of industrialization.

2. On-site labor-hour reduction rate:

that is, the reduction, compared with traditional methods, in the labor hours used on the project site per 10,000 square meters of floor area. This indicator directly reflects the release of productivity driven by technological progress.

These two indicators are more valuable than a simple “prefabrication rate,” and better embody our original aspiration in developing prefabricated buildings—achieving workforce reduction, efficiency gains, and quality improvement through industrialization.

Traditional BIM (i.e., BIM 1.0) is a static information container with a non-cloud-native architecture that collaborates through files. The government-side BIM cloud platform is used for review, approval, and supervision;a unified IFC-format BIM cloud platform can be used on the government side.

As for the enterprise side, because each enterprise has different application scenarios,the government cannot prescribe a single unified BIM software.

But the government should provide clear guidance: 

It should point toward a data-integrated “one model all the way” BIM platform—that is, a BIM 2.0 cloud platform. Such a BIM cloud platform must have a cloud-native architecture, be based on a unified structured database shared across all disciplines and the entire process, and comply with the fundamental systems-engineering principle of a “single source of data.”

Much of today’s BIM application is fragmented, with each party doing its own thing, ultimately creating “information silos”; this is not what we want.

What we must forcefully promote is the “one model all the way” BIM 2.0 platform. This is not a simple 3D drawing tool, but rather a “single source of data” management system.

How should this be understood? It requires that all parties participating in the project—the project owner, the surveyor, the designer, the general contractor, subcontractors, and suppliers—place their data uniformly on a cloud platform designated by the project owner. Everyone shares a structured relational database and presents the data through 3D visualization.

From planning and design, to component production, to on-site assembly, and then to later O&M,all information flows and accumulates within this model.This is not only a technical issue, but also a management principle—an embodiment of the “single source of data” in systems engineering.

This is a non-negotiable basic requirement for realizing building industrialization and smart construction.

Whoever fails to achieve full-process project data sharing and model integration is not qualified to undertake government projects.

The biggest pain point behind the current difficulty in promoting prefabricated buildings is the inability to close the commercial loop.

Why? Because most of what we are producing now is pure structural modules, such as precast stairs and precast composite slabs. These products have low added value—they are just a pile of rebar and concrete. And our labor costs are cheap, so using machine-produced components to replace cheap labor simply does not add up financially.

How do we break the deadlock? The answer lies in “integrated modules.”

We must shift our focus from “structure” to “function”. For example, we should vigorously develop integrated kitchens and integrated bathrooms, with tiles, cabinets, and sanitary ware all installed in the factory; for example, develop integrated standard hotel rooms, with furniture and even soft furnishings completed in the factory; and further, develop integrated smart hospital wards, integrating medical equipment head units and intelligent systems into them.

The benefit of doing this is that we shift the high-added-value retail profits from decoration, furniture, appliances, and smart systems to the component factory.

For the customer, buying a bathroom module means getting not a concrete box, but a finished product—fully fitted out, with sanitary ware and equipment, ready to use once water and electricity are connected.

In this way, prefabricated buildings gain high added value, enterprises earn profits, the market logic works, and a true commercial closed loop can be formed.

Let me address another deep-seated issue.

For a long time, our construction industry has been accustomed to “project thinking”—taking on one job, doing one job, leaving once it is finished, and starting from scratch again on the next project.This mindset prevents us from accumulating experience and iterating.

Developing the prefabricated building industry must be led by “product thinking.”

What is product thinking? It means building houses the way we build cars.

1. We must establish intermediate product lines, such as standardized stairs, balconies, and exterior wall panels, as well as integrated bathroom and kitchen modules  , achieving standardized design and mass smart manufacturing.

2. We must establish end-product lines, such as fully modular smart assembly of hospital ward buildings.

Only with standardized intermediate products can we achieve the low cost and high efficiency of industrialization; only with menu-style end products can we meet individualized market demands.

We should guide enterprises to settle down and refine their products, rather than spending their whole lives on “one-off” projects.

Finally, I would like to discuss a deeper technical-concept issue, which concerns whether the fundamental advantages of prefabricated buildings can be realized.

The key technical factor currently constraining the healthy development of prefabricated buildings is that we still cling to the “equivalent to cast-in-situ” seismic design philosophy.

We always want to connect components as firmly as in cast-in-situ construction,pursuing continuous structures with strong connections.

But please consider the wisdom of our ancestors—traditional timber structures with mortise-and-tenon connections.

During an earthquake, mortise-and-tenon joints can rotate and slide to a limited extent; on the one hand, they greatly reduce the seismic response by releasing stiffness, and on the other hand, they dissipate seismic energy through friction.Every joint is a self-adaptive, variable-stiffness “weak connection,” and the seismic performance of such a structure is far better than that of a rigid “strong connection.”

If we blindly pursue “equivalence to cast-in-situ,” prefabricated buildings can at best only match cast-in-situ construction and can never surpass it; they may even become “born defective” because of the fragility of the connections.

Therefore, we must bravely advance a revolution in seismic design philosophy: replacing “seismic-resistant structures” with “seismic-resistant mechanisms.”

We should formulate a “seismic code based on weakly connected discrete structures” suited to prefabricated buildings, or what could be called a “seismic mechanism design code.”

This will allow prefabricated buildings to stop imitating cast-in-situ construction and instead fully exploit the seismic performance that should inherently be superior to cast-in-situ—dissipating energy through joints and through the relative movement between components.

At the same time, we should actively develop the corresponding new “embedded module + damping” assembly system, so that each module not only carries its own weight but also works adaptively during an earthquake like an energy-dissipating “mechanism.”

This is the vast horizon for the development of prefabricated building technology, and it is also our opportunity to overtake on the curve and lead the world in building technology.

Distinguished leaders and colleagues,Developing the prefabricated building industry is a profound transformation—from “construction” to “manufacturing,” and from “structures” to “mechanisms.”

This path has difficulties and challenges, but the direction is bright.

As long as we seize the key of the demand side, make good use of the EPC model, consolidate the foundation of BIM 2.0, pursue the high added value of integration, establish product thinking, and bravely drive innovation in seismic design philosophy, our province’s prefabricated building industry will surely take the lead nationwide and inject strong new momentum into the high-quality development of our province’s economy!