It is possible to use wood chips as flooring for outdoor dog kennels. There are, however, a few factors to consider. Despite their softness and natural appearance, wood chips can shift and need frequent maintenance to prevent mold and odors. It is also possible for some dogs to chew or swallow wood chips, which can harm their health. Suppose you want to maintain a clean and safe surface for your dog. In that case, it's important to choose a high-quality wood chip material, avoid using chemically treated wood, and replace or replenish the wood chips regularly.