All this happened, more or less.

From the point of view of the entrepreneur, the least attractive feature of putting-out was the lack of control over the workforce. The labourer worked unsupervised, at his own pace and when he felt like it. When the household's income reached a certain point, there was a tendency to prefer leisure to labour, even if the market - and the merchant - were crying out for more goods. One answer was to concentrate production In d ~Jnglc centre and to move from paying piece-rates to paying wages. That required higher fixed capital in the form of buildings, and consequently greater vulnerability to market fluctuations, but it did allow the workers to be supervised and kept up to their work. These 'manufactories' proved to be an effective way of responding to market opportunities in the eighteenth century. Blanning. p. 124

A complex distribution and control system got replaced by a compact self-synchronizing unit with key manufacturing processes already built in. At the time guilds no longer had the monopoly on industrial production, therefore the putting-out business model was no longer advantageous.