Two problems are prominent in finite-element (FE) simulations of large plastic deformation in heterophase materials. The first concerns the pre-processing step in which the heterophase structure has to be modelled. The multiphase element method is an effective tool for assigning heterogeneous properties to the FE net. The simulation of large inhomogeneous deformation leads to the second problem. When strain localization has to be reproduced by the finite elements, the geometrical anisotropy of the elements increases and finally enforces remeshing. This includes the interpolation of intermediate results from the old net to the new. The multiphase element method and the Akima interpolation scheme have been implemented for the elasto-plastic plane strain elements of a nonlinear FE software package. Investigations of large-scale plastic deformation for both strongly idealized (`unit-cell') and realistic micro-structures of Ag - Ni composites have been performed, using both the multiphase element technique and the remeshing procedure described here. The comparison with experimental results confirms the serviceability and the power of both methods.