TL;DR: When Marx advocated "industrial armies" he meant world-wide Gulag. This was made pretty clear by the hard-core communist teacher when we discussed the text during History classes in a Moscow high school in early 1980-ies. The word "Gulag" was not used, of course, but the need for military-style industrial organization was emphasized.
First and foremost, one cannot analyze the Manifesto of the Communist Party out of context. This is not an abstract text. It contains polemics with the critics of communism, especially when talking about "community of women".
Second, one has to look at how the Communist Program was implemented by the most orthodox Marxists - Lenin's bolsheviks (of course, their claim of orthodoxy has been widely disputed by their less successful brethren).
Third, one has to remember the wider context of political philosophy, specifically, the Plato's theorem that no society can be simultaneously
- People are naturally different in their abilities, so in a Fair society the more able will be rewarded more
- In a Free society, wealthier people will give their children better education and bequeath them their wealth
- This will make the society UN-Equal, because some people will enjoy un-earned advantages.
Here is the official program:
- Abolition of property in land and application of all rents of land to public purposes.
- A heavy progressive or graduated income tax.
- Abolition of all rights of inheritance.
- Confiscation of the property of all emigrants and rebels.
- Centralisation of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.
- Centralisation of the means of communication and transport in the hands of the State.
- Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the
improvement of the soil generally in accordance with a common plan.
- Equal liability of all to work. Establishment of industrial armies, especially for agriculture.
- Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more
equable distribution of the populace over the country.
- Free education for all children in public schools. Abolition of children’s factory labour in its present form. Combination of
education with industrial production, &c, &c.
(The list omits abolition of family, which is discussed in detail before the list.)
The common theme of these 10 points is total state control over both the economy and private lives of people with the express goal of making it Equal at the expense of Freedom and Fairness.
(NB: What is left out is who will be administering all these novel and numerous state functions. The "Classic Marxist" answer is that the role of the state will be continuously increasing until the state will disappear when communism is established. This flies in the face of the familiar reality of no one ever relinquishing power voluntarily (counterexamples of Cincinnatus and Washington, being so rare, only support the point).)
Thus there is little doubt that the society envisioned by the Manifesto consists of separate individuals who do the work assigned to them by "the state" (which, according to Marx, is run directly by all the proletarians in the style of direct democracy), and the "industrial armies" are the units that are sent to fulfill the task at hand, whether building a plant or collecting a harvest.
This is pretty close to what was in fact implemented in the USSR, except that they failed to abolish the family completely (although party committees had authority to punish sexual escapades).