Yeah, that area directly north of Smolensk is bad to defend.
I look at the map and see areas where a decent defensive line can be made, starting from the north:
South of Leningrad there's a few rough hexes, then heading southeast to Novgorod there are swamps; a reasonably good division in one of those spots will hold against hasty attacks by a single German division.
On the other side of Lake Ilmen you have a river, with the Valdai Hills to the east, then running southeast a few more rivers, light forests and some swamps to the area reaching south of Vyazma.
From there you have the Bola river passing by Bryansk, curving west to Chernigov.
This is a very defendable line, which you can establish before the Germans get there, it's beyond the Axis start line, meaning there will be a few turns of those Germans moving forward beyond supply radius. By the time the first units get there they won't be in strength, and you'll have some time digging in and resting.
Again, a decent ( rifle ) division, around 50+ experience, in a rough, urban, or swamp hex, with a fort level built maybe to 2, will hold against a hasty attack by a single German division. This can provide time for bad divisions ( 25 or 30 experience ) to train up to something kind of useable for defense ( about 40 or 45 ).