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You can set the cache attributes at item-descriptor level.
<item-descriptor name="sku" item-cache-size="5000" query-cache-size="50" cache-mode="simple">
The cache mode can be simple, distributed, locked etc.
Caching is provided OOTB by ATG repository but if you can want to use third party cache solution there is an provision to configure repository to use third party caching.
Refer Oracle Commerce Repository Guide for further details
You can set the cache-mode attribute of the item-descriptor.By default cache-mode is simple. For example
According to the requirement u can set ur cache-mode.
As mentioned by others, the type of cache mechanism to use really depends on the requirements you have, and where exactly you are trying to implement the caching i.e. in the catalog or order etc...
You will be able to get specific answers if you can provide more specific details related to your requirement details