That would be very true of the factory system developed in Britain during the Industrial Revolution (starting circa 1750, and circa 1800/1810 in the US). Before then, and in France, Spain and Italy which were primarily agricultural societies at the time, the small shop system was the norm, and it wasn't until circa 1800 that changes in production started to kick in.
The German states developed in a slightly different manner than the UK model. Small states with localized resources began using specialization of resource production (iron, coal, and iron/steel production centers), and trading networks to produce the metal ingots required by factories cranking out specialized products. "Solingen" was a regional metal working center were several firms made primarily knives, swords, and a limited range of other metal wares. These ventures were often co-operatives that subcontracted work out to firms that were sometimes competitors, and through social and marriage ties formed a organization that could crank out hundreds of thousands of very similar looking products for trade throughout continental European countries and their colonies.