Jonathan Parshall (of Combinedfleet.com and Shattered Sword fame) gave a very good lecture (starting at 26 minute mark, although Citino is also a good lecture as well) at 2013 International Conference on WWII at the National World War Two Museum.

The long and the short of it is that the Soviet Union's planned economy and the earlier Stalinist crash industrialization of the Five Year Plans gave the Soviet economy a great deal of resilience despite the occupation of the western USSR. The FYP stressed metallurgy and engineering, which made it much easier to switch industrial production to munitions and other military products. Moreover, many factories were designed to shift from civilian to military production right from the start. The FYP had also created a managerial class and a labor force that was used to both shock action and acting under a crisis. The crucial difference between the FYP and the war economy was this was a crisis not of the Soviet state's own making, which benefited the Soviet economy. One of the problems of the FYP, and one that would continue to dog the Soviet postwar planned economy was that factory managers in interrelated sectors often acted as a clique to preserve both their own power and fudge production numbers. This was one of the reasons why the Great Purges of the late 1930s hit Soviet factories quite hard is because the cliques soon devolved into a circular firing squad. But in the context of the war, such self-preservation ran counter to the larger issue of the very survival of the Soviet state and its people. Counter-intuitively, Moscow actually eased up on central management of the economy and delegated control to local Party administrators.

What this meant was that the Soviet economy was much more flexible and resilient than the 1941/42 losses would suggest. Even though Barbarossa destroyed or captured approximately 20% of the USSR's prewar industrial capacity, there were a number of latent strengths within the USSR that allowed Soviet industrial production to grow during the war. Soviet economic managers during the war were willing to accept poor finish and other defects in production, but also willing to innovate production lines if the cost-benefit was favorable. As Parshall aptly put it, Soviet weapons may have been crude, but their production strategy was not.

In contrast, the German production and procurement methods were much weaker than the Soviets and often German economic management played to the weaknesses of the system rather than its strengths. The polycratic Third Reich meant there were entrenched satrapries of competing power blocs that meant there was greater friction in rationalizing and streamlining the war economy. German industrial leaders in the early war period often chafed at the thought of expanding plant for wartime production, which they judged as superfluous for the needs of peacetime economic hegemony. German rapacity in plundering western Europe's industrial core was often short-sighted; industrial plant would be ripped from France, for example, where it would then sit idle in Germany for want of workers. German traditions of craft production and qualität made it much harder to shift over to more realistic production methods and expansions. The German military's main procurement office, the Waffenamt, was hobbled by habits of both technical conservatism and a tendency to tinker with production lines for minor improvements. With regards to tank production, Todt was able to introduce some rationalization and dispersal in the early war years. So while the German tanks that invaded the USSR were quite mediocre on many levels, there were there and the dispersal schemes made the German tank factories resistant to disruption by Allied bombing.

German war production became much more rationalized once it became apparent that the USSR was not going to fall apart. Foot-dragging by private firms became much less prevalent in light of the new situation. But a new set of problems emerged that prevented a complete turn around of the German war economy. Shortages of strategic minerals like tungsten made it much more difficult to expand production and bottlenecks led to shortfalls and inferior quality ersatz substitutions. Expanded production often meant having to rob Peter to pay Paul in an increasingly zero-sum economy. The shortages were not only raw materials, but human as well. Labor shortages had always been acute in the Third Reich and it soon became an epidemic with total war. Forced and slave labor increasingly became the norm rather than the exception in the post-41 German economy as non-Germans became another resource allocated to sectors of the German economy. The result was a persistent de-skilling of the German economy, which in turn made it both harder to expand production and introduce new innovations. A number of mid- and late-war German weapon designs accepted compromises in fit and finish to get to the front lines. German jet engines, for example, were known to have an operating life of approximately 20 hours (and operationally it was half that) due to ersatz materials and poor quality control, but this was acceptable because it meant the Germans could deploy jet aircraft on the front lines. Further dispersal because of Allied bombing also imposed a further burden on production lines as dispersal not only put a limit on production numbers, but were sometimes located in areas ill-suited for complex machinery. Salt mine factories were both humid and corrosive, thus damaging the end products.

Sources

Harrison, Mark. The Economics of World War II: Six Great Powers in International Comparison. Cambridge: Cambridge University Press, 1998.

_.Guns and Rubles: The Defense Industry in the Stalinist State. New Haven [Conn.]: Yale Univ. Press, 2008.

Tooze, J. Adam. The Wages of Destruction: The Making and Breaking of the Nazi Economy. New York: Viking, 2007.

Partly also because Germany had huge economic constraints, both industrial and financial. Germany was facing opponents with a combined output of at least four times as large as that of the Reich and their Empire, and the Soviets were able to mobilise their economy much more effectively.

The German militarization effort had been going like the clappers since 1933, and suffered periodic balance of payment crises that interrupted the production of equipment because Germany was so dependant on imports of food and specialised industrial imports. Pre-War Nazi Germany often faced a literal choice between guns and butter.

Conquering Europe in 1940 relieved some of the pressure on things like non-ferrous metals, but not on food. It didn't give quite the economic boost you might expect as productivity collapsed in occupied Europe. The Reich started sucking in slave labour into high-producitivity Germany, such that 1/3 of all people in the armaments industry (ie the wartime industrial German economy) were foreigners. Ironically, this means Germany had more immigrants under the Nazis than ever before or since.

The USSR in 1942, before land-lease (which started in 1943) produced twice as many infantry weapons, as many artillery guns, and almost as many tanks and planes as the USA. Relative to Germany, this meant a Soviet advantage of 3:1 in in small arms and artillery guns, 2:1 in combat aircraft, and 4:1 in tanks (with better quality tanks in the T-34). This was an enormous achievement of the Soviets, rather than something they lucked out on due to Nazi incompetence. As the commenter says above, this was the Soviets successfully achieving the model of American industrial assembly line production and the Nazis not only being able to, despite the Nazi fascination with this economic model.

1944, when Germany finally achieved full economic mobilisation in the War, also marked the beginning of the unravelling of Germany's financing of the war. The system - very tight rationing of goods forcing consumers to save their wages in banks, who then bought Government debt with those savings - began to unravel as inflation began to rise out of control and people started taking their money out of the banks to spend on the black market. As the German war effort in 1944 swallowed up 60% (!) of national output and the Wehrmacht consumed just under 100bn Reichsmarks, more than national income in the late 1930s, economic collapse even without the bombing was inevitable.

TL;DR the Soviets had a superior industrial war economic organisation, the Germans were out matched on all sides, and the German economy faced very tight financial constraints and began to disintegrate once it surpassed them.

The Wages of Destruction - The Making and Breaking of the Nazi Economy - Adam Tooze, 2006