ILOG now selling plug-ins to extend the power of supply chain applications

For years, ILOG has supplied the optimization engines that power the supply chain management modules of enterprise software suites from major vendors such as SAP and Oracle. Now ILOG wants to generate additional revenue by building semi-custom applications that augment the enterprise vendors' supply chain systems.

"It's rare when an enterprise suite meets 100 percent of a company's needs," says Mike Morrell, a director in ILOG's manufacturing business unit. "Traditionally, there have been two ways of dealing with that—customize [applications inside] the suite, or buy a best-of-breed solution. Customizing applications is expensive, and it can make supporting and upgrading the applications difficult. The best-of-breed approach creates integration problems. We are offering a third choice."

Morrell says ILOG has templates to quickly build the exact solutions a company needs, along with a strategy for making it easier to integrate its extensions with an enterprise suite. "We use the exact data models and integration points already in the suite," he says, "so everything works as if it is a single application."

Currently, ILOG has extensions for transportation management and detailed scheduling, but Morrell says others will follow as customers demand them.

MG Industries—a Malvern, Pa.-based supplier of liquefied gases such as nitrogen and argon—was among the first to buy an ILOG extension. MG Industries uses SAP's APO package for production planning, but the transportation management component of APO couldn't support MG's business model.

"The transportation pieces of large suites are geared toward moving product from a plant to a distribution center, with a third-party logistics supplier taking over from there," says Matt Brown, VP of supply chain management at MG Industries. "ILOG came in with an extension that handles our critical transportation problem, which is delivering bulk chemicals directly to tanks at customer sites. None of the supply chain packages we considered could handle that."

Brown also was impressed by ILOG's strategy of using SAP's connectors and data models to link its extension with APO. "It all looks and works like one piece of software," he says.