Yes ,you definitely need to use wood chips in a propane smoker for the production of smoke. If the smoke is not produced during the smoking process, then the flavor of the meat will be the same , whether you smoke it or cook it in an oven. Moreover the Flavor of the meat is dependent on the type of wood chips used . If you want an intense smoky flavor ,then consider using hardwood chips, while for light smoky flavor softwoods like apple wood is better But if you can't use wood chips due to some reason or trying to smoke for Longer period,then you can use wood pellets or wood chunks in the place of wood chips. They have different texture than wood chips, but provide similar flavor.