In Oracle Cloud, managing items and their attributes across multiple organizations requires careful structuring of inventory and item organizations. The best way to configure this setup given the customer's requirements is as follows:

Plants and Distribution Centers as Inventory Organizations: Inventory organizations are required to manage on-hand quantities, perform transactions, and handle the physical movement of materials. Plants need to be inventory organizations to manage production, and distribution centers need to be inventory organizations to manage stocking and distribution.

Corporate Engineering Organization as an Item Organization: An item organization is responsible for centrally defining item attributes. By setting the Corporate Engineering team as an item organization, you ensure that item definitions are controlled centrally. The team can define standard attributes while allowing inventory organizations (plants and distribution centers) to modify certain attributes at their level based on local needs.

This structure allows for centralized item management with localized flexibility for plants and distribution centers.