Planing and moulding operations carried out within the woodworking industry make an extensive use of rotary machining. Cuttermarks are produced on the timber surface, which are generally accepted as unavoidable. More noticeable surface defects may be produced by such factors as cutterhead imbalance, and until recently most research has concentrated on removing these defects. When a high quality finish is required, a further machining operation, such as sanding, is often required to remove cuttermarks. What is required is a modified machining process, which combines a surface closer to the ideal fixed knife finish, while retaining the flexibility, practicality and cost effectiveness of rotary machining. It has been theorized that the surface finish of planed and moulded timber products may be improved by introducing vertical cutterhead pulses. This thesis concerns the progress made towards the modification of the rotary machining process to improve surface form for planed timber components. Thus simulation of the rotary machining process is described, allowing an evaluation of the surface form quality produced by the modified machining process, and allowing a comparison to be made between the effectiveness of new machining process and conventional rotary machining. In order to verify the effectiveness of the proposed machining method, a small-scale planer with an actuation system using piezoelectric actuators to control the spindle movement was designed. An electrical model of the piezoelectric actuators was combined with a finite element model of the spindle to create an overall model used for simulation. The modelling technique used represents significant progress in the field of mechatronic system modelling, and a useful tool for designing active spindle systems.