Alright, this is going to be a bit of a beast of a post, since it covers a whole lot of topics under one idea.
To begin with, workshops, here's my suggested system, modified from a lot of stuff i've seen over the last few months on the forum.
* Workshops are not built, but are instead designated, similar to how the hospital works now.
* Various pieces of equipment and tools are needed for the workshop to function. For example, a blacksmith's would need: A furnace or forge for heating metal, an anvil, a hammer , a pair of tongs, and a source of water to quench the metal such as a bucket.
* Multiple Dwarves can work in the workshop zone, as long as they're doing two different tasks, to use the blacksmith example above, with only one extra set of tongs for tools, One dwarf could heat the metal and quench finished pieces, and the other could do the actual smithing with the hammer and anvil, speeding up the process. Making things could be a multi part process as illustrated above.
* Not all tasks require a workshop, Milking a creature for instance, would really only require the creature and a bucket.
* Different levels of complexity can accomplish different tasks. A workshop dedicated to making simple clay pots would only need a kiln and a potter's wheel, but creating glazes would require different tools, and making indents and patterns in the pottery would require additional tools.
Furniture has a lot of potential for variables. For starters, there would be a lot more call for equipment for workshops. Some pieces have to be assembled on the spot, such as a furnace, but most pieces would be built in an appropriate shop.
* Different designs of pieces of furniture would do different things. Example, benches or tables could be made larger to serve more dwarves, or simply be a small table for personal use.
* Design could vary across different cultures, A tropical Culture could favor four poster beds with insect netting, while a more temperate one prefers something more basic.
* Different levels of sophistocation in workshop furniture could affect performance, Such as the difference between a normal furnace and a blast furnaces, which would be harder to make.
Tools are something that's been slightly implemented. For example, your dwarves need axes to cut wood, and picks to mine. Some other tools are already available, like buckets, and mugs, though some have no use currently.
*Tools could be stored in workshops for group use, or owned by dwarves, which would come into play once the economy starts, a good craftsdwarf may purchase his own set of superior tools.
* A dwarf (or adventurer!) with the appropriate tools could complete tasks without a workshop, such as whittling a figure out of wood if he had a knife and some wood. This Could perhaps lead to such things as dwarven hobbies and art projects.
* Greater or Lesser quality of tools affects the outcome of a finished project. A statue made with a bad chisel , no matter the skill of the dwarf, will be markedly inferior to one made with a quality tool by the same dwarf.
Alright, i think that's all of it, i'll edit this as needed as you guys post suggestions. Have at it.