From Automated Workflows:
When Automator workflows are built to process files/folders as input, those files/folders will be processed as a batch, through the entire Automator workflow. In workflows that must open the input files in an application and perform further processing, this can become a problem, as the workflow would open every single file in the application at once, and then proceed to process the entire batch of opened files through each action in the workflow. For workflows that will be processing potentially hundreds or thousands of files/folders, this method is impractical.
The Automator Multi-Item Processing Utility provides a workaround for this situation. The Automator Multi-Item Processing Utility will convert an Automator workflow that has been saved as an application into an AppleScript-based application that will loop through dropped files/folders, processing them through the workflow individually.