I use newspapers, through the whelping and the first week or so. Then I use newspapers under a whelping pad, sometimes. Sometimes I just use newspapers.
Outside -- usually I carry them outside at about 3 weeks old for a short time every day, and then by 4-5 weeks old they are outside most of the day and in at night. Outside, I use cedar chips. They really aren't sticky like pine shavings and the cedar does naturally deter bugs. The cedar chips also prevents a muddy mess as it soaks up the rain before it has a chance to make huge mud pits.
The outside area usually has a crate half or two that the pups will use like caves, and a cot. Sometimes I use a wood dog house that the dam can get up on, to get away from them. For a while, I will put x-pens within a larger kennel fencing, which allows the dam to jump out and be away from them some of the time. But they learn fast to climb over x-pens.
The inside are has the whelping box, and a doggy door to a secure kennel. At first only the dam can go in and out. You can corral the puppies in their whelping box, until you can't. By then, they can carry themselves in and out on their own. I do cover the outside are with a sun screen to deter hawks. I worry about snakes, though we really do not have hardly any poisonous snakes here, nor, anything large enough to take on a pup, especially if the dam is anywhere near.
Usually, I use wood chips or just bare concrete in the puppy pen outside section, newspapers inside.
Heidi Ho, Odie
Joy-Joy, Bear Cub, Hepsi-Pepsi
Cujo2, Karma Chameleon
Ramona the Pest, Kojak -- who loves you baby?
Tiny Tinnie, Susie's Uzzi, Kaiah -- The Baby Monster.