The main objective of this doctoral dissertation is to, based on theory and empirical research, confirm the possibility of optimizing wood clusters by applying the supply chain management concept. In order to achieve the research objective, a theoretical model has been created to test and confirm the assumptions on a significant statistical contribution of the supply chain management concept on the effectiveness and efficiency of wood clusters. Efficiency is defined as the relationship between the supply chain management factors - cooperation with partners, information technology and the process of adding value (inputs) and supply chain performance (outputs), whereas, effectiveness reflects the relationship between supply chain performance and cluster’s competitiveness. In the theoretical part of the dissertation, special emphasis is put on the classification of clusters according to the manner in which the processes of cluster members are integrated. Furthermore, the thesis elaborates on the the basic supply chain management determinants. It explores the role of the supply chain management factors in vertically integrated systems (in this case clusters) and identifies the supply chain management factors that strongly contribute to the competitiveness of business entities in wood industry (information technology, the process of adding value and cooperation with partners). The empirical research tested the possibility of optimizing wood clusters by applying the aforementioned supply chain management factors (information technology, the process of adding value, cooperation with partners). The study included 58 business entities: 22 being members of the Croatian cluster and 36 of the Austrian cluster. The collected data were first analyzed by the factor analysis. The model hypotheses were tested using the multiple regression analysis which showed a statistically significant contribution of the information technology, cooperation with partners and the process of adding value variables to the performance of the supply chain. This proves that the concept of supply chain management contributes positively to a cluster’s efficiency. Furthermore, the analysis confirmed a statistically significant contribution of supply chain performance on a cluster’s competitiveness, which confirms that the supply chain management concept also positively effects efficiency, which clearly indicates the possibility of wood cluster optimization. The research results unquestionable indicate the significance and thus the need to implement the supply chain management concept in vertically integrated business systems and represent a starting point for future research. The computed correlations between variables represent a useful input for business decision making, not just at strategic but also at operational level.