The tree gets cut, branches are removed. The tree trunk is sent to a mill. A mill is sort of like a massive horizontal band saw that can move along tracks. The mill either cuts it into quarters or cuts the sides off so it’s a rectangular prism. At that point they can cut planks/poles to an approximate thickness and length. Once that’s done the wood is still pretty rough but can be sold. It can also be cut again on a different saw for a smoother finish and more precise dimensioning.
Edit: a mill can also cut tree trunks into live edge slabs. Doesn’t have to be normal planks of wood.
From what’s been explained to me, plywood is made by stripping a thin layer from a tree trunk (think like a massive vegetable peeler running against a spinning log) to make a very thin sheet of wood. Sheets are cut to size and pressed together in alternate directions with some sort of solvent to hold the entire sheet together.
I don’t know for a fact if the same process applies to 2 x 4s or other such cuts of wood, but this is how plywood is created
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