1 The link between Purchasing and Supply Management maturity models and the financial performance of international firms Fábio Pollice (USP- Brazil) pollice.fabio@gmail.com Afonso Fleury (USP- Brazil) acfleury@usp.br Abstract In the last 40 years, Purchasing and Supply Management (PSM) has moved from a transactional role in materials management towards a more strategic role, aligned to long- term business requirements. This evolutionary process can be represented by Maturity models: in the advanced stages of a maturity model, there is a broader scope in the activities which PSM is responsible for, and a deeper impact in the business performance. However, traditional PSM performance indicators, like material cost savings, are not appropriated to evaluate its overall performance at the latest stages. The combination of PSM Maturity Model and “Return on Capital Employed”(ROCE) allows to evaluate the benefit that the evolution through the more advanced stages of the PSM professionalism brings to the firm financial performance. This paper details both models and discusses the methodology to be used to prove that companies with higher PSM maturity level will present superior financial results. Key words: Purchasing Strategy, Supply Management, Maturity models, Performance 1. Introduction The current business environment presents a strong competition in global markets, with cost pressures; focus on new products development with shorter lifetimes than ever; and a high customer and client’s expectations to have their needs and requirements satisfied. In order to support these new challenges, Supply Chain Management has become more strategic at company level and Purchasing and Supply Management (PSM) are following this trend. In the past, PSM was considered a passive and administrative area. However, recently it has evolved as a strategic partner to the business, contributing to the total business performance. This evolutionary process of PSM can be represented by Maturity models, which reflects the fact that PSM is becoming more mature as a business function and more integrated in the context of strategic plans. The PSM maturity model developed by Van Weele and Rozemeijer considers 6 stages: transactional orientation, commercial orientation, purchasing coordination, process orientation, supply chain orientation and value chain orientation. The first three are more focused on the function itself and the last three define a cross functional approach. (Van Weele et al, 1998; Rozemeijer, 2000; Van Weele 2010).