Shaolin Iron skills are used to condition parts of the body to either be hit, or deliver a powerful strike. Breaking bricks with the hands is an example of Iron palm or Iron fist. Kicking bats would be an example of Iron leg. It is useful to learn these skills so that you know you can develop a powerful strike when needed.
These skills are developed by a combination of Chi Kung exercises and external conditioning. Some herbs may also be used to aid in the healing process. You will usually start by striking something soft such as rice and then change to harder objects along the way such as dried beans and then gravel.