How did the factory system replace the domestic system of home-based work?

The factory system replaced the domestic system during the Industrial Revolution primarily through the introduction of power-driven machinery and the centralization of production.12

Under the domestic system, workers used hand tools to fabricate goods in their own homes using materials provided by merchant-employers. The transition to the factory system involved several key shifts:13

• Mechanization: The application of waterpower and the steam engine allowed for large-scale production that could not be achieved with simple hand tools.12
• Centralization: Unlike the decentralized domestic model, the factory system required workers to congregate in specialized establishments located near power sources and transportation routes.1
• Control and Organization: In the domestic system, workers often maintained independence over their tools and hours. In the factory system, employers owned the tools and raw materials, setting strict working conditions and hours.1
• Standardization: The introduction of interchangeable parts enabled mass production, allowing relatively unskilled workers to assemble standardized components into finished products.1