Plywood was the first engineered wood invented by man. It is made by stacking together thin sheets of wood veneer - also called pliers - with the direction of each ply's grain reversed from its neighboring plies.
These plies are bonded together through intense heat and pressure and strong adhesives - usually phenol formaldehyde resin. This makes plywood a type of composite material.
Plywood production requires a good log, called a peeler, generally straighter and larger in diameter than that required for processing by a sawmill. The log is peeled into sheets of veneer which are then cut to the desired dimensions, dried, patched and glued together to form the plywood panel. The panel can then be patched, resized, sanded or otherwise refinished, depending on the market it was intended to be sold in.
Plywood is usually used instead of plain wood in situations where the wood needs to be flexible but stable. Plywood has a strong resistance to shrinking, twisting and warping because of the differences in the layers.