The terms prefabrication and modular construction are often used interchangeably. Prefabrication refers to the manufacturing of construction elements away from the construction site and assembly on site. In principle, these prefabricated elements can be customized for the specific project. Modular construction specifically describes instances of prefabrication where the elements are standardized modules. Each modular unit can be e.g. a dorm room, a factory-fitted bathroom, or an element in a facade.
Prefabrication and modular construction is especially relevant if
the building consists of multiple similar units (e.g. office rooms) and/or has a complex design that is difficult to construct on-site (e.g. special façade elements or steel frames)
the construction site is very remote, or in a highly dense urban area.
there is access to an efficient off-site production site
the construction site planning is complex due to e.g. many stakeholders, limited space or time
the construction site has a short build season, e.g. due to the climate, or is on very expensive land.