A wood furnace is used to convert wood into ash or charcoal. It must be built out of fire-safe materials.
Operating a wood furnace requires the wood burning labor enabled.
Building a wood furnace requires the architecture skill and a skill relevant to the material used to make the furnace (masonry for stone/glass/soap or any of the metalworking skills for metal).
Wood, charcoal, and coke are not an option as building materials for this workshop, as these are not fire-safe materials.
As with all other buildings that require an architect, Dwarves will admire wood furnaces and receive a good thought if the architect (or builder) had a high skill.