MOUNTAIN VIEW, CALIFORNIA - August 3, 1998 - ILOG S.A. (NASDAQ NMS: ILOGY) announced today that Thomson Consumer Electronics (TCE), the leading consumer electronics company in the United States, has reduced shipping costs by three to ten percent at three of its North American warehouses by optimizing freight loading with the new Virtual Loader™ software. ILOG Solver™, the industry’s leading optimization component, powers Virtual Loader. The new load planning module for order, warehouse and traffic management systems was developed by Solution Dynamics, Inc., an ILOG partner. Virtual Loader is currently in service in Thomson Consumer Electronics’ Indianapolis, Los Angeles and Toronto warehouses, and will be deployed in all of TCE’s finished goods warehouses in North America by the end of 1998.

Thomson Consumer Electronics is a leading consumer electronics company that manufactures and distributes RCA, GE and PROSCAN brand home entertainment products. TCE makes thousands of shipments every day -- ranging from televisions, VCRs and CD players to digital satellite systems -- to major retailers across North America such as Circuit City, The Good Guys, Sears, Target and others.

"We are still installing Virtual Loader in our warehouses, but we expect at least a 3% overall savings in domestic transportation costs," said Kevin George, project manager for warehousing management system and load planning at Thomson Consumer Electronics. "Using Virtual Loader last year, we saved approximately 10 percent of our transportation costs associated with product transfers between our distribution centers by significantly reducing the number of trucks needed to carry the same freight. It’s now time to apply this technology on a broader scale."

Virtual Loader is a set of highly flexible software components that deliver rapid, accurate solutions to load planning problems. Virtual Loader accesses information from TCE’s warehouse management system, and specifies the products to be shipped to any given location. Virtual Loader, powered by the ILOG Solver optimization engine, computes optimum configurations to maximize truck and container loads in accordance with priority constraints generated from both customer and TCE requirements.

"Thomson Consumer Electronics uses an extremely complex set of loading profiles to satisfy the requirements of a diverse set of customers," said Walt Maximuck, president of Solution Dynamics, Inc. "ILOG Solver is the key to this project’s success. ILOG’s optimization engine brings all the power, flexibility and speed needed by Virtual Loader to bear on large, rapidly changing sets of requirements."

Virtual Loader generates 3-D load plans to detail the location of every unit to be shipped, both on pallets and in trucks, and determines the correct size and number of trucks needed. It tells load assemblers the sequence of goods to be picked from the warehouse, which eliminates both the time and space required to stage loads on docks prior to actual loading. The load planning module runs every 15 minutes to support last-minute reconfigurations when orders are altered.

"Not only does Virtual Loader reduce the number of trucks needed overall, it takes into account very complex constraints such as product prioritization, palletization requirements, and product integrity requirements. For example, you can’t stack 60-inch TVs on top of VCRs because they would be crushed. The system automatically honors constraints to come up with the optimal plan," said George.

About Solution Dynamics, Inc.
Solution Dynamics, Inc. is a leading provider of 3-D load planning products. SDI’s product line covers the full 3-D load planning spectrum. Virtual Loader runs in both stand-alone environments for lower shipping volumes and fully integrated client server environments to support high-volume shipping. SDI’s products run on both Windows and UNIX platforms.

About Thomson Consumer Electronics
Through its RCA, GE, and PROSCAN brands, Thomson Consumer Electronics is the leading consumer electronics company in the United States. With an approximate 20% share in home entertainment products, Thomson is the U.S. sales leader in color televisions, digital satellite systems, and videocassette recorders, and the second largest marketer of camcorders and audio and communications products. Through a network of five U.S. manufacturing plants and high volume component and assembly facilities in Mexico and Brazil, Thomson produces more than four million television sets each year.

About ILOG
ILOG is a leading provider of advanced C, C++ and Java software components for graphics and resource optimization. ILOG products deliver high performance data visualization for user interfaces; integer, linear and constraint solvers for resource optimization, scheduling, logistics and planning applications; dynamic rule systems for intelligent agents and real time data flow control, and components for integrating modules with real time and relational data sources. ILOG was founded in 1987, and now employs approximately 400 people in seven countries. Visit www.ilog.com for additional information.

ILOG is a registered trademark, and ILOG Optimization Suite and ILOG Solver are trademarks of ILOG. Virtual Loader is a registered trademark of Solution Dynamics, Inc. All other company and product names are trademarks or registered trademarks of their respective holders.