The Smithy is the third crafting station you are able to create in Ark. It is used for crafting a large number of items, including basic firearms and metal constructs. There are also a number of Saddles that can only be created in the Smithy.
Crafting with the Smithy is as simple as crafting from your inventory, with the added benefit that the Smithy can hold a lot more than your inventory. It does function pretty much the same way, but you can also setup the crafting and walk away. You do not need to keep the interface open or remain near it for the crafting to continue. This also allows you to set up multiple Smithies and run crafting jobs in each one, allowing you to bulk craft with ease.
Also keep in mind that items created in the Smithy must be repaired in the Smithy. This applies to items made in the Smithy, but not to structures that are made in the Smithy.
In the screenshots below I show multiple Smithies set up together with one backwards to the other. That one I keep stocked for general crafting and repairs. The other screenshots show the crafting interface with the various Engrams, Engram folders, and Engram Details, as well as the various crafting buttons lit up.
On the Ark you have a few different crafting stations as well as crafting in your inventory. These you have to craft before you can use them of course, but they provide you with advanced crafting options and allow you to craft even more Engrams. And unlike Inventory crafting you can use many of these crafting stations at the same time.