One of the surface defects that arise in sheet metal working is when the part is removed from the die. Since there are no external forces to make this defect, the origin of such fail is known as residual stress. Residual stress can develop in sheet metal forming due to non-uniform deformation. In this paper, the workpiece is carbon steel with different volume fractions and arrangements of ferrite and pearlite. Due to different stress-strain curves for each phase after cold rolling, one phase deforms elastically, whereas the other undergoes elastic-plastic deformation. On unloading to zero applied stress, this effect can produce residual stress. Therefore, in order to reduce the surface defects in sheet metal forming, an intelligent predictive code using a validated elastic-plastic finite element method is generated for a plain strain deformation of cold rolling process. Results show that in regular arrangement of ferrite and pearlite, workpiece microstructure has great influence on the residual stress distribution, and by decreasing the width of each strip, the fluctuation of residual stress is reduced. The purpose of this study is to develop the state of the art instructions for arrangement of phases after hot rolling process where the total residual stress produced after cold rolling and sheet metal working will be minimized.