EDITORIAL
By Pierre Haren, ILOG CEO

ILOG has become the essential ingredient for keeping manufacturers competitive.

Manufacturing is increasingly moving away from broadly targeted products to products created to meet specific orders. Such customization takes tight inventory control. Makers can no longer stock up, knowing everything will eventually be used. Now they must match materials to orders, stocking only enough to meet individual specifications. Doing otherwise could result in huge, costly inventories.

To help manufacturers be more customer-centric, vendors of ERP and SCM software have begun offering advanced planning and scheduling (APS) systems. Unlike materials requirement planning (MRP), which maintains inventories at set levels, APS considers the real-time availability of each resource before determining manufacturing and shipping dates. By doing so, it keeps down inventory by optimizing the flow of materials from suppliers to manufacturers, and finished goods from manufacturers to customers.

ILOG currently stands at the center of the APS arena. Virtually all the top ERP and SCM software vendors have built APS systems based on our optimization software, ensuring their customers get the best ordering solutions.

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ILOG Optimization Powers Leading APS Solutions
Makers see 300% ROI with new systems

Oracle Corp.’s recent purchase of ILOG optimization components for inclusion in its advanced planning and scheduling (APS) system for the Internet underscores the growing importance of both ILOG and APS in supply-chain management. All the leading enterprise resource planning (ERP) application vendors are either developing or shipping APS solutions, with the top five – SAP, Oracle, J.D. Edwards, Baan and PeopleSoft – relying on ILOG optimization.

Widely adopted
Similarly, ILOG optimization technology has been adopted by such leading supply-chain management (SCM) software vendors as Manugistics, CAPS Logistics, Numetrix, Chesapeake, i2 Technologies, SynQuest and Paragon Management Systems. All have come to depend on the power and performance of ILOG’s market-leading components in their APS systems.

AMR Research has described APS as being "one of the hottest areas in enterprise applications." The preeminent industry and market analysis firm specializing in enterprise applications and related trends and technologies, AMR Research explains that the growing popularity of APS is based primarily on its ability to cut costs.

Already the earliest APS users have seen return on investment (ROI) as high as 300%, a figure sure to increase as their APS systems become more widely deployed.

Expertise in short supply
Driving these systems are highly sophisticated optimization algorithms. With the expertise for these algorithms in short supply, virtually all the top ERP and SCM application vendors have turned to ILOG for its unsurpassed optimization software.

ILOG is the world leader in supplying optimization components renowned for their speed, versatility and ease of use. With the company’s unmatched technology for constraint-based programming, application vendors are assured of having the most powerful optimization algorithms for APS.

Automates and optimizes
APS has become a crucial function of supply-chain management. It automates and optimizes the flow of materials from suppliers to manufacturers, and finished goods from manufacturers to customers. APS varies greatly from materials requirement planning (MRP), which was introduced about 30 years ago and is still widely used in ERP systems. APS applications consider the real-time availability of each resource before determining manufacturing and shipping dates, while MRP systems order materials to maintain inventories at set levels.

APS: a better way
MRP is ideal for "push" manufacturing, in which a maker mass-produces a product for general consumption. But with competition growing ever fiercer, consumer demand is increasingly playing a greater role in determining what is produced. This "pull" paradigm requires manufacturers to customize their products for customers, and APS allows producers to tightly control their inventories in matching supplies to specific demands.

"APS is a revolutionary improvement of the tools that planners and managers use to cope with the increasing complexity of the business environment," states AMR Research in reinforcing the fact that APS is not just an update of MRP, but a complete departure.

Last December AMR Research pegged the APS market at $1.4 billion, but has since had to revise that estimate to $2.6 billion. According to the firm, the five-year cumulative average growth rate for the market is 48%, and should reach $18.6 billion by 2003.

ILOG leads the pack in optimization
ILOG optimization components now represent 50% of ILOG’s revenues. The de facto standard for optimization today, the components are not only used in SCM, but also in satellite mission planning, personnel scheduling and any operation requiring tight control of limited resources.

Their use by top ERP vendors, as well as small ISVs like Adonix, exemplify a growing trend: the unleashing of pent-up potential in companies through advanced ILOG optimization.

Our flagship position in optimization, coupled with our leadership in visualization with the most powerful graphics engines on the market, fully explain IDC’s naming of ILOG as No. 1 in software components.

The ideal solution to any planning or scheduling problem lies with ILOG. Running our optimization and visualization components together makes full management of resources, through monitoring and control, a reality.

To further discover the benefits of using ILOG, visit our Web site at www.ilog.com for more information and to download demos or beta versions of our products. Specifically for optimization developers, take advantage of the downloadable version of ILOG OPL Studio, the revolution in intuitive solution development in both constraint and linear programming.

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