The Tanning Rack is a rather important crafting station. It is necessary for making Leather from Rawhide. Other than that, it has no other uses. The Loom could be considered another variant of the Tanning Rack, because they both allow the crafting of one rare item.
When in range of the tanning rack with rawhide in your inventory, using the quick craft menu (PC: Hold C) and select the leather option to craft leather.