In a recent seminar, while discussing the advantages of software automation, I mentioned that Web to print software can reduce manufacturing costs between 20-50%. Immediately, someone in the audience asked how that was possible when the cost of paper alone is 25% of the price. Clearly this person was well-versed on print ratio studies. For anyone not familiar with the ratios studies, they are the graphics arts industry's closest approximation of financial benchmarks.
I tried to explain that as print run lengths get shorter, the percentage of cost due to paper declines and, in a manual workflow, the percentage of cost allocated to annual labor increases. I must not have been very convincing, because that person remained skeptical. So, I grabbed a marker and started creating a table like the one below with different steps in the workflow, the cost of each cost center and the time in each cost center, with and without a Web to print solution.
A lot of conversations are required to explain the chart. Automation will automate a task a certain percentage of the time (i.e. 75%), and the balance will require manual intervention (which is factored into the table). It took some time, but by the end of that conversation, most people agreed. While you could argue with the specific cost per cost center and the specific times, it's difficult to argue with the model.
It's important to recognize that the savings from most automation software is application-dependent. That means for a Web to print software, the time and cost savings for a business card will be greater than the savings from a college course pack. The most accurate estimates of savings should be based on calculations from an application analysis (applications worked on the most). See the bottom of this helpful web page for a way to calculate ROI for RSA's WebCRD Web to print as an example of calculating the cost savings of Web to print.