At a session following SMACNA’s Fab Forum, Santos offered a candid critique of prefab’s promise and the industry’s obsession with downstream fixes. “Prefab, prefab, prefab. You need manufacturing, that’s what’s going to be the edge,” he said. “But when you look at the process as a whole, prefab is downstream. When do we ever solve a problem downstream?”

Santos’ point is simple, if unorthodox: the real value isn’t in the prefab itself, but in the processes and information flows that precede it. It’s about the upstream decisions – Virtual Design and Construction (VDC) and the web of communication between teams – that determine whether prefab can actually deliver its advertised benefits.

The ‘Black Box’ of VDC

In the construction value chain, VDC often serves as the mysterious middle child. “They always seem to be this little black box,” Santos joked. “We’re trying to just get rid of that kind of mentality, and get to the ecosystem around VDC.” Too often, VDC is blamed for delays, over-detailing, or costs that exceed estimates. But Santos argues these are symptoms, not causes: mistakes and inefficiencies in VDC usually reflect problems further upstream, in the handoff from sales, preconstruction, or even the client’s vague expectations.

Small Changes, Big Impact

Santos’ message is buttressed by hard numbers. Citing a study from FMI, a major consulting firm, he notes that just a 10% increase in labor efficiency on a $20 million project can yield $2 million in savings – money that flows straight to the bottom line. But, he adds, the goal isn’t to cut jobs. “My objective is not for you to get rid of people. It’s to use them more efficiently and effectively. Nobody wants to be working on something that they know is just going to get scrutinized and not work.”

This is the heart of his argument: the pursuit of continuous improvement, modeled after the Toyota Production System, where perfection is the benchmark and every process is designed to highlight problems, not bury them. “We want a process that highlights problems, brings them up, and then you want to hire people that know how to solve those problems and then deliver on customer value.”

Measuring Value, Not Just Cost

One of the biggest shifts Santos encourages is redefining value – not just as a number on a balance sheet, but as the sum of emotional, financial, and functional benefits delivered to both internal and external customers. “If you’re a pain in the ass to work with, think of all your suppliers. Where do you fall on this?” he asked. “I don’t buy just on cost. I buy on value.”

This means understanding the needs of the field, the shop, and the customer – often with as much rigor as you’d apply to a flowchart. “Go to the field, understand what they need. Same thing with the shop. Go to the shop, understand what they need. Now build that for me, and we do this in our everyday lives. When you order from Amazon, you know exactly what you’re ordering. But for some reason, in construction, we did it the opposite.”

Standardization: Lessons from Dell and the 98% Contractor

The industry’s resistance to standardization is another target of Santos’ critique. Drawing a comparison to Dell’s modular computer systems, he explains how standardizing choices upstream can create the illusion of infinite customization, while actually making production and installation more efficient. “From standards, you can get to standard work, and then from standard work, when you get to be more standard, your organization becomes more in that realm of standardization.”

But the obsession with big, complex SOPs (Standard Operating Procedures) can be self-defeating. “How many people actually read SOPs?” he quipped. Instead, he advocates for simple, visual guides – color-coded spreadsheets, clear diagrams, and direct feedback loops.

The industry’s Achilles heel, he suggests, is the inability to close on a job. “We totally suck at just closing that job up,” Santos said. The solution? Break down every phase of construction, from mobilization to closeout, and standardize the process at each stage.

Leadership and Accountability

None of these changes will stick, Santos warns, without leadership that creates vision, aligns resources, and invests in training. “The organization will follow its leadership. Does that make sense to everybody?” he asked. From the CEO down to the department head, clearly defined roles and responsibilities – and a commitment to continuous training – are essential.

Efficiency, he adds, is a multiplier. “You guys all come in and I’m the CEO, and you’re like, ‘Hey, boss, I’m running at 90%.’ We all remember in school, 90% is an A. But the part that really sucks about this math is efficiency is a multiplier. 0.9 times 0.9 times 0.9 times, five times a week, is 59%. So as an organization, we’re failing. But man, I’m doing 90%, boss.”

Chasing White Space

For Santos, the real enemy isn’t the machine or the worker – it’s the “white space” where information gets lost, delayed, or misunderstood. “For 45 years, I’ve been chasing white space, not your machine.” That means focusing not just on material flow, but on information flow: how quickly and accurately instructions, feedback, and lessons learned travel through the organization.

The key, he says, is relentless measurement, feedback, and documentation – transforming lessons learned into institutional knowledge and closing the gap between vision and execution. “Without a vision, you’re going to have confusion. Without the proper skills, you’re going to have anxiety, because people don’t know what to work on.”

The prefab revolution is real, but its success will depend on an honest reckoning with process, culture, and leadership. Santos’ advice?

“Take a step back, stop, do a quick assessment. Ask what is it that I want to be in the future?” he concluded. “Get that right. It’s really going to help.”