The 'vernier' system used by Porsche gives a better result than used to be commonly used by most manufacturers in the sixties.
It was common that cams were timed using a simple dowel or Woodruff key and errors were difficult to correct.
Race engine builders used to use offset keys or offset dowels to deal with errors that could be as far out as '1/2 a tooth'.
More sophisticated engines such as Lancia Fulvia V4's used a snail cam to adjust cam timing and they could be adjusted to give a 'spot' on result.
Porsche use a simplified setting system and specify an inlet valve lift at the Overlap position (TDC/Z1) on the intake stroke and a dowel arrangement to allow reasonably accurate setting.
The Tolerance is for the amount of inlet valve lift, one end of the tolerance range advancing and the other end retarding the cam timing.
The problem, which has been described is that there are tolerances between the various parts of the drive arrangement such as the sprocket, the hub and the dowel pin which makes it difficult to be 100% accurate but for road engines it is obviously good enough.
Valve to piston clearance in a standard, unmodified engine should never be an issue regardless of which end of the tolerance you choose for the timing.
Once you start modifying engines the situation changes and it is important to check.
I like to see a minimum of 2mm but other seem happy at 1.5mm.
There is another issue and that is the Z1 mark on the pulley.
These are not accurately marked and it has been reported in the USA that variations of up to 4 degrees can occur between the mark and real TDC when checked with a timing wheel.
Again this seems OK for road engines but should be checked for highly tuned units.
We have been making some adjustable sprockets for a few years now and they do allow precise adjustment, the hubs are 6AL4V Titanium and the sprockets are a hard anodised 7000 Series Aluminium.
