I'm trying to understand how exceptions are handled in an event driven world using micro-services (using apache kafka). For example, if you take the following order scenario whereby the following actions need to happen before the order can be completed.
At any stage in this scenario, there could be a failure such as:
How do you track that each stage has been called for and/or completed?
How do you deal with issues that arise? How would you notify the frontend of the failure?
Some of the things you describe are not errors or exceptions, but alternative flows that you should consider in your distributed architecture.
For example, that an item is out of stock is a perfectly valid alternative flow in your business process. One that possibly requires human intervention. You could move the message to a separate queue and provide some UI where a human operator can deal with the problem, solve it and cause the flow of events to continue.
A similar thing could be said of the payment problems you describe. If an order cannot successfully be settled, a human operator will need to investigate the case and solve it. For that matter, your design must contemplate that alternative flow as part of it, and make it so a human can intervene somehow when the messages end up in a queue that requires a person to review them.
Those cases should be differentiated from errors or exceptions being thrown by the program. Those cases, depending on the circumstance, might in fact require to move the message to a dead letter queue (DLQ) for an engineer to take a look at them.
This is a very broad topic and entire books could written about this.
I believe you could probably benefit from gaining more understanding of concepts like:
The idea behind compensating transactions is that every ying has its yang: if you have one transaction that can place an order, then you could undo that with a transaction that cancels that order. This latter transaction is a compensating transaction. So, if you carry out a number of successful transactions and then one of them fails, you can trace back your steps and compensate every successful transaction you did and, as a result, revert their side effects.
I particularly liked a chapter in the book REST from Research to Practice. Its chapter 23 (Towards Distributed Atomic Transactions over RESTful Services) goes deep in explaining the Try/Cancel/Confirm pattern.
In general terms it implies that when you do a group of transactions, their side effects are not effective until a transaction coordinator gets a confirmation that they all were successful. For example, if you make a reservation in Expedia and your flight has two legs with different airlines, then one transaction would reserve a flight with American Airlines and another one would reserve a flight with United Airlines. If your second reservation fails, then you want to compensate the first one. But not only that, you want to avoid that the first reservation is effective until you have been able to confirm both. So, initial transaction makes the reservation but keeps its side effects pending to confirm. And the second reservation would do the same. Once the transaction coordinator knows everything is reserved, it can send a confirmation message to all parties such that they confirm their reservations. If reservations are not confirmed within a sensible time window, they are automatically reversed by the affected system.
The book Enterprise Integration Patterns has some basic ideas on how to implement this kind of event coordination (e.g. see process manager pattern and compare with routing slip pattern which are similar ideas to orchestration vs choreography in the Microservices world).
As you can see, being able to compensate transactions might be complicated depending on how complex is your distributed workflow. The process manager may need to keep track of the state of every step and know when the whole thing needs to be undone. This is pretty much that idea of Sagas in the Microservices world.
The book Microservices Patterns has an entire chapter called Managing Transactions with Sagas that delves in detail on how to implement this type of solution.
A few other aspects I also typically consider are the following:
Idempotency
I believe that a key to a successful implementation of your service transactions in a distributed system consists in making them idempotent. Once you can guarantee a given service is idempotent, then you can safely retry it without worrying about causing additional side effects. However, just retrying a failed transaction won't solve your problems.
Transient vs Persistent Errors
When it comes to retrying a service transaction, you shouldn't just retry because it failed. You must first know why it failed and depending on the error it might make sense to retry or not. Some types of errors are transient, for example, if one transaction fails due to a query timeout, that's probably fine to retry and most likely it will succeed the second time; but if you get a database constraint violation error (e.g. because a DBA added a check constraint to a field), then there is no point in retrying that transaction: no matter how many times you try it will fail.
Embrace Error as an Alternative Flow
As mentioned at the beginning of my answer, not everything is an error. Some things are just alternative flows.
In those cases of interservice communication (computer-to-computer interactions) , when a given step of your workflow fails, you don't necessarily need to undo everything you did in previous steps. You can just embrace error as part of you workflow. Catalog the possible causes of error and make them an alternative flow of events that simply requires human intervention. It is just another step in the full orchestration that requires a person to intervene to make a decision, resolve an inconsistency with the data or just approve which way to go.
For example, maybe when you're processing an order, the payment service fails because you don't have enough funds. So, there is no point in undoing everything else. All we need is to put the order in a state that some problem solver can address it in the system and, once fixed, you can continue with the rest of the workflow.
Transaction and Data Model State are Key
I have discovered that this type of transactional workflows require a good design of the different states your model has to go through. As in the case of Try/Cancel/Confirm pattern, this implies initially applying the side effects without necessarily making the data model available to the users.
For example, when you place an order, maybe you add it to the database in a "Pending" status that will not appear in the UI of the warehouse systems. Once payments have been confirmed the order will then appear in the UI such that a user can finally process its shipments.
The difficulty here is discovering how to design transaction granularity in way that even if one step of your transaction workflow fails, the system remains in a valid state from which you can resume once the cause of the failure is corrected.
Designing for Distributed Transactional Workflows
So, as you can see, designing a distributed system that works in this way is a bit more complicated than individually invoking distributed transactional services. Now every service invocation may fail for a number of reasons and leave your distributed workflow in a inconsistent state. And retrying the transaction may not always solve the problem. And your data needs to be modeled like a state machine, such that side effects are applied but not confirmed until the entire orchestration is successful.
That‘s why the whole thing may need to be designed in a different way than you would typically do in a monolithic client–server application. Your users may now be part of the designed solution when it comes to solving conflicts, and contemplate that transactional orchestrations could potentially take hours or even days to complete depending on how their conflicts are resolved.
As I was originally saying, the topic is way too broad and it would require a more specific question to discuss, perhaps, just one or two of these aspects in detail.
At any rate, I hope this somehow helped you with your investigation.