From first to "wurst": the erosion and implosion of German technology during WWII: the German management system, especially in terms of the technological industry, was a complex and convoluted bureaucratic nightmare

Air Force Journal of Logistics,  Summer, 2004  by Charles A. Pryor, III

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Furthermore, in 1940, a system of rings was introduced into the industry. These rings were essentially committees but not limited to one industry. These rings were concerned with items and issues that transcended all industry. For example, the ring concerned with the making of steel would have an impact on all committees who used steel (which was all of them). The system that finally evolved consisted of "4 main rings for subcontracting and 8 main committees for the finished product." (42) Each of these committees and rings had subcommittees and subrings to them, further increasing the bulging bureaucracy. Known as Self-Government of Industry, this system could be effective in the hands of a skilled manager like Albert Speer. The armament industry under Speer became more efficient and productive (43) despite the complicated system. However, under managers like Karl-Otto Saur, the opposite happened. Indeed, as Goering stated:

   Saur was a man completely sold on figures. All he wanted was a
   par on the shoulder when he managed to increase the number of
   aircraft from 2,000 to 2,500. Then the Luftwaffe was blamed that
   we had received so and so many aircraft and where were they. (44)

Unfortunately, for the Luftwaffe, this thinking tended to dominate the war-production effort. The result was a gross number of aircraft (quantity), many of which were unusable or obsolete (quality).

Quantity Versus Quality

One of the toughest challenges faced by management in a technological industry is the issue of quantity versus quality. Both are important and must be effectively blended to have a successful program. Unfortunately, for a country whose industry was poorly managed and resource-constrained and faced with an enemy with a seemingly endless supply of high-quality equipment, the natural tendency to fight mass with mass (matching quantities) overrode the necessity to instill some quality in the airplanes produced. (45)

The result was a large number of inferior aircraft that could not have kept pace with the Allies, even if they were numerically similar. In mortal combat, quality is often the divide between success and failure. This was proven by the Tuskegee Airmen flying bomber escort from Italy. Although the number of P-51s sent to escort a bomber formation did not change drastically, they still escorted more than 200 missions without a single bomber loss. This is attributed to both the skill of these pilots and the quality instilled in the machines they flew. Alas, the Germans did not have the quality in their aircraft to overcome this.

By war's end, the Germans had lost the technological superiority they owned at the beginning. Although this can be directly attributed to their management system, this issue was further exacerbated by their failure to integrate the capabilities of the captured lands effectively. Indeed, rather than capitalizing on the capabilities of the workers in the conquered lands, the Germans merely plundered them and brought their populations into slave labor. (46) They failed to realize and take advantage of what was available to them. The result was a slave workforce that resented its masters. Needless to say, this was another cause of their diminished quality. Finally, as the war progressed, the Germans began conscripting just about any male with a pulse, regardless of his civilian expertise. This led to a lack of skilled workers, without whom quality suffered. (47) This is almost a double tap for quantity over quality--specifically, make the armed forces larger to counter the large force regardless of special (of needed) skills, depriving industry of the skilled workers necessary to instill quality in products sent to the armed forces.