Why and how
Hitler was now locked in a protracted war of attrition against an economically much stronger enemy and was set to lose. This wouldn’t happen immediately, and so once again he had a time window to work in. He very well could stay put and work to strengthen his holdings, but that would require losing protagonism to the USSR, with whom an even higher level of cooperation could be sought at a dangerous geopolitical cost.
An exciting alternative existed. The Reich lacked the resources to win this war of attrition. But the amazing victory achieved over France made it seem possible to defeat any army on the continent and do so quickly. The only thing standing in the way of the continent’s largest reservoir of resources was one such army. And so in 31 July 1940 Hitler ordered preparations to invade the Soviet Union, and by early 1941 the decision was final.

The logic of Barbarossa can be summed up as: winning a short war in the East to acquire the means to fight a long war against Britain and America.

If the Red Army were defeated and European Russia taken over, Swedish ore shipments through the Baltic would be safe and Ukrainian grain and iron aswell as Caucasian oil would flow west. Germany’s economic inferiority versus the Anglo-American alliance would be alleviated, improving the chances of victory in the long war. And if Stalin was defeated prior to American entry, Hitler hoped that would corner Britain into an impossible position and force it to negotiate. And a knocked out USSR would also give Japan a safer position from which to attack Western possessions in Asia and the Pacific.
For this a true strategic synthesis was devised, with operational planning and armaments production united under one coordinated vision.

Economic priorities were rearranged so as to prepare for both the short Eastern and long Western campaigns, and redirect all resources to the West as soon as the East was settled. Needed in the long term, exports received a higher steel quota at the expense of the army. Yet it made up for this by cutting ammunition production; the 1939-40 burst had left comfortable stocks. Its targets, Ruestungsprogramm B, were largely met. For the fast and intense campaign divisional strength rose –he gives 143 on May ’40 to 180 on June ’41, though on another source I can find 165 to 209-, with a core of ~33 mobile divisions equipped by doubling the number of medium tanks. Tank construction was spread over several plants, booting up production quickly and reducing inter-company friction and vulnerability to aerial bombardment at the expense of economies of scale.
This required sapping men from the workforce: Germany was to invade with its manpower already overstretched and fully committed while the Soviets still had millions to mobilize. Yet this was compensated by releasing veterans for an “armaments holiday” of months in the factories, followed by a “war holiday” in the front and then, once the fighting was over, the army would lose manpower and resources for naval and aerial industries.
The Luftwaffe’s production did not grow as much despite increases in manpower. This is because it was the most subject to delays in production increase but also because it focused on the development of new craft rather than economies of scale.
Rather than focusing on immediate output, the entire war economy invested heavily in future capacity, building or expanding aircraft, tank, aluminum and particularly chemical plants. One case was a white elephant: Koppenberg, manager of Junkers, tried to build a thousand-aeroengine plant on the principle of Fordist mass production, but all it could achieve was 198 engines in 1944. Other projects were very successful but only showed their full potential after the war: IG Farben’s chemical plant in Auschwitz is today one of the largest synthetic rubber producers in Europe.