The Electronic Automotive parts manufacturing company produces different types of components that are stored in different buffers. Kanban method is the most standard control methods in practice. The alternative method for this would be Heijunka approach or the production levelling approach which focuses on neutralizing the demand variation. A dynamic systems approach is proposed in this paper to investigate the challenges of implementing production levelling. A model is developed using system dynamics to stabilize the production units. The results obtained in this paper illustrate the concept of Heijunka which helps reduce the fluctuation in the upstream supply chain. Converting of uneven customer demand into predictable manufacturing process leading to better results in the buffers and maintaining minimal inventory is a challenge to be tackled effectively, which has been considered in this research to be the primary objective. The research has resulted in the backlog reduction strategy at the two strategic locations, smoothening of shipment rate, meeting of the desired production rate, better anticipating of order rate, minimization of inventory, better order fulfilment rate, and faster production adjustment.