We present a new supernode-based incomplete LU factorization method to construct a preconditioner for solving sparse linear systems with iterative methods. The new algorithm is primarily based on the ILUTP approach by Saad, and we incorporate a number of techniques to improve the robustness and performance of the traditional ILUTP method. These include new dropping strategies that accommodate the use of supernodal structures in the factored matrix and an area-based fill control heuristic for the secondary dropping strategy. We present numerical experiments to demonstrate that our new method is competitive with the other ILU approaches and is well suited for modern architectures with memory hierarchy.