When you study ratings, it's important to know what they really mean. A recent example was a January report that A.M. Best Co. had placed Reliance Insurance Co. on its "watch list." A.M. Best Co. is the highly respected rating service specializing in the insurance business. Reliance is the parent company of Planet Insurance Co., a provider of casualty insurance for trucking concerns. How serious was this? Well, it was a sort of nonevent. The same attested to Reliance's remarkable strength. It explained that eight of Reliance's units have the A-plus rating. This is Best's highest.Another two Reliance units have the A rating. To put this in perspective: A-plus is Superior, while A is Excellent. Companies are also rated B-plus (Very Good), B (Good), C-plus (Fairly Good) and C (Satisfactory). More to the point, the report noted that nothing significant enough for an actual rating reduction had occurred at Reliance. Why the "watch list" then? It reflects a 1986 third-quarter decline in policy holders' surplus--from $541 million in June to $363 million in September. This decline, which resulted from a general stock portfolio correction during that period, is being offset by the parent company, Reliance Group. We expect to see Reliance off the "watch list"shortly. Meanwhile, both Reliance and Planet offer superior values, opportunities and protections for policyholders. That's how Reliance units earned Best's Superior and Excellent ratings in the first place...and why they expect to retain them.

THE STATE OFAMERICAMANUFACTURING: Reports of the death of heavy industry has been greatly exaggerated. There's still plenty of freight out there for the trucking industry. Last year, U.S. companies managed to churn out 13 million cars and trucks; 88 million tons of steel and 884,000 tons of coal. What's more, a 3% annual increase in industrial production is predicted for the next 13 years. So, save your eulogies. What American manufacturing is suffering from is a severe case of obesity. These producers will have to become "lean and mean" to withstand the competition of the next few decades.An increasing wave of imports has created industrial Darwinism. Only the "fittest" will survive. Specialization will become synonymous with profits. Tired of family carclones, the American car market now wants vehicles unique to each lifestyle.General Motors had better put its flexible manufacturing to the test and turn out four-wheel drives, sports cars, minivans and convertibles. Waiting in the wings are foreign companies whose current output of 600,000 cars in the U.S. is expected to double by 1990. The steel industry must get down to "fighting weight" as well--shedding outdated ideas and equipment. High quality sheet steel will be the most important product of the Nineties.Lagging behind in technology, American steel plants will begin to specialize in a particular segment of the sheet-making process. Since so many manufacturers have procrastinated on retooling, capital equipment sales are expected to grow, along with power plant construction and specialty chemicals. So, while some still cry out for government protectionism, it looks like competitiveness, inventiveness and flexibility may let heavy industry heal itself.

THE ILLUSIVE SERVICE DISTINCTION: Intense customer service often earns organizations a front row seat in the heart of the customer. But sensitive customer complaint handling can beam you up on the stage. A recent study by Technical Assistance Research Programs (TARP), showed that 95% of dissatisfied customers would purchase from a merchant again if their complaint was resolved with dispatch. True customer loyalty can develop in times of customer duress. Essentially, people would not only purchase again, but studies show that each customer would tell eight friends about their positive and memorable treatment. Turning your customers into fans is the thrust of a recent Success! magazine essay by Nancy K. Austin. Specific ideas for skill fully handling customer complaints include: (1) Avoid a "put it in writing"mentality. This am, roach discourages complaint discussion and denies companies the opportunity to turn around abad service experience.(2) Provide a significant amount of time for customers to offer feedback on service. Asking for a response too soon will cause customers to respond with quick superficial reflections. Asking too late can make corporate service priorities appear as an afterthought. (3) If a negative response is received - act quickly. Customers actually have low expectations of service. Service complaint expectations are even lower. A positive impression is created by moving fast to resolve the problem when delays are expected.

A NEW PARTNERSHIP FOR TRUCKING: Railroads and trucking companies have been rivals for decades. In many cases, the rail and the road competed for the same freight business...until now. The nationwide movement towards "competitive cooperation" has hit the transportation industry. A new team approach is on the agenda for some railroads and trucking companies. Consider the recently developedrail-truck network between Union Pacific Railroad and eleven regional trucking lines. The new ventureis calledUnionPacificFreightServices/LTL.Bycombiningtheeconomiesoftherailwiththeflexibilityof the truck, this new arrangement is projected to open up additional shipping markets for both parties. Thisnewrail-truckrelationshipiscalledtransloading.Onemajorareatargetedfortransloadingislongdistance shipping...territory that has traditionally been primary terrain for trucking. Also targeted is the less-than­ truckload size markets. The emergence of new efficiencies and an attitude of greater flexibility may provide greater benefits for those that cooperate instead ofcompete.

HOW TO IMPLEMENT A CUSTOMER SERVICE VISION: There are two sources of renewal for truckers. The first is excellent customer service. The second is innovation. Here are some customer servicepointsthatpickuponthespecialemphasiswehavegiventhiskeyareainrecentissues.Whatever business you're in, successful service firms have something to teach you. That's the word from James L. Heskett in a recent issue of the Harvard Business Review. While most goods-producing companiesseparatemarketingandmanufacturing.leadingservicefirmstendtointegratethosefunctions.Servicesare usually produced and marketed at the same place and time--and often by the same staff. Because service providers work closely with customers, they serve and sell simultaneously. Not possible in your business, you say? Think again. Heskett contends that any industry can adopt a strategic service vision by aligning operations with the service concept...and here's how: (1) Identify a target market segment. (2) Design a service concept that answers those buyers' needs. (3) Adjust operating strategies so that they clearly support the service concept.(4) Develop a system for delivering the product or service that is compatible with both the customers' needs and your operating strategies The purpose of a strategic' service vision is to maximize the perceived value of your transportation service while minimizing the cost of delivering it. The net result is a highly prized, much sought-after service that is very profitable to the provider.

TURNING IDEAS INTO ACTION: Any company can claim to be in pursuit of a competitive edge, but only the minority have a systematic approach to achieving their goals. As Roy D. Hahn reports in Personnel Journal, traditional management structures are generally "effective for dealing with standardoperational matters, but inadequate for managing a changing. project-oriented environment."So what's the solution? Based on his success at Century Companies of America, Hahn proposes the formation of proactive teams to design, monitor and report on corporate innovation. Here is Hahn's seven-phase approach, which requires a formal written statement at the completion of each stage: (1)Conceptualization: Problems must be clearly identified before they can be solved. (2) Feasibility analysis:Justify the reasons for the project and explore various means of accomplishing it. (3) Detailed planning:Define project milestones; then develop a task map for each phase. (4) Project construction: Begin putting your plans into action, testing results as you go. (5) Implementation: Keep formal communication channels open so that everyone involved knows the project's status at all times. (6) Post-implementationreview: Complete an audit of the project ,documenting observations on its process and outcome as well as all costs involved. (7) Sign-off: The teams officially release the project to the company at large.