Offsite construction methods have been promoted and recognized globally as advanced construction techniques. Panelization, a two-dimensional form of offsite construction has brought about many benefits including lower transportation requirements and design flexibilities. In North America, the panelized construction technique has become popular particularly for wood-frame wall panels for residential construction. However, although utilizing this advanced construction method can greatly improve the working environment and productivity, the conventional mentality in construction, which overlooks the value of an automated management system to support offsite prefabrication and onsite installation, hinders its potential. An automatic material estimation system can capture all computer-aided design (CAD) data from building information modeling (BIM) files automatically and convert them into enterprise resource planning (ERP) readable data so that the ERP system can be updated for the purpose of material estimation. With the assistance of a feature-based modeling method, the proposed automatic material estimation system can save huge amounts of manual work for quantity take-off and all required CAD data can be captured by the system in a few seconds. Although highly dynamic market demands result in continual changes in design, production plan, schedule, and inventory levels, the adoption of an automatic material estimation system could account for these dynamic changes in order to maximize production. Therefore, in this paper, an automatic material estimation system is proposed in order to enhance the design and estimation process in the manufacturing environment. The proposed system is introduced and the development of supportive software is described. The proposed system is implemented as a case study in a panelized construction manufacturing facility, ACQBUILT, Inc., based in Edmonton, Alberta, Canada.