The circular economy promotes a closed-loop system where resources are used for as long as possible and challenges the conventional linear model of "take-make-dispose." In the manufacturing industry, this entails creating products and procedures that can be recycled, repaired, or reused to reduce the use of virgin materials and environmental impact. However, understanding the implementation barriers is crucial before investing in a strategic approach for adoption. This study analyzed challenges using the index of the Item Objective Congruence (IOC) technique and expert opinions. The findings identified seven significant challenges: Lack of Awareness and Education, Modifications in Consumer Behavior, Infrastructure Limitations, Lack of Skills and Technical Challenges, Lack of Government Support, Environmental Impact, and Lack of Guidelines and Standards, which play significant roles in the successful implementation of circular economy practices in the manufacturing industry. These findings provide valuable guidance for the strategic implementation of circular economy principles in manufacturing and practical insights and recommendations to businesses, policymakers, and stakeholders on effectively embracing circular economy principles in the manufacturing industry.