A guided wave simulation method for layered composites based on the wave and finite element scheme is presented. An approach for calculating complex displacement fields such as those generated from piezoelectric transducers is developed. The scattering of waves from different types of defects is computed. A rigorous energy based criteria is proposed for model order reduction. All calculations are carried out in the frequency domain and an inverse discrete fourier transform is performed to get the time domain result.Numerical examples of a multi-layered composite beam are performed to assess the performance and validate the methodology. Three types of damages are simulated namely a notch, a transverse crack and an internal delamination. The results are validated against finite element simulations and are found to be in excellent agreement. Moreover the approach is found to be orders of magnitude faster compared to finite element simulations.