Purchasing portfolio usage and purchasing sophistication

Purchasing portfolio models have caused considerable controversy in literature. Many advantages and disadvantages have been put forward, revealing a strong disagreement on the merits of portfolio models. This study addresses the question whether or not the use of purchasing portfolio models should be considered as a sign of purchasing sophistication. Using data from a broad sample of industries, it was found that purchasing sophistication is a two-dimensional construct: purchasing’s professionalism and purchasing’s position within companies. After controlling for firm size, the position and the professionalism of purchasing were both positively related to the greater use of the purchasing portfolio. Findings indicate that portfolio usage indeed is a sign of purchasing sophistication