This article is published in English.
Practical notes: Agent Tool Use and Function Calling in Production — When
Operable walkthrough of Practical notes: Agent Tool Use and Function Calling in Production — When: contracts, checks, and drop-in code slots for teams shipping this pattern.
Use this as an operator-facing rebuild of the ideas in “Agent Tool Use and Function Calling in Production — When Agents Reach Into the World”: clear stages, ordered code slots, and recovery notes that survive a handoff. The Overview stage works best when treated as a measurable surface. Capture one golden transcript, one failure case, and the rollback note before expanding scope. Keep configuration outside application code. Environment files, secret stores, and feature flags belong in one place operators can audit without reading the whole graph.
How Agents Decide Which Tools to Call and When, Structured Output Handling That Prevents Hallucinated Results, Retry and Fallback Patterns for Tool Failures, and the Observability That Shows You Which Tools Are Hurting
For the How Agents Decide Which stage, define the inputs, the owner of the step, and the exit criteria before changing code. Operators should be able to re-run the step from a known checkpoint without guessing hidden state. Document the happy path and the recovery path together. Retries, human gates, and dead-letter handling are part of the product, not later polish. Authenticate at the gateway and re-authorize at the data plane. A bearer token alone is not a tenancy boundary.
The Tool Use Decision — When Agents Should and Should Not Call a Tool
For the The Tool Use Decision stage, define the inputs, the owner of the step, and the exit criteria before changing code. Operators should be able to re-run the step from a known checkpoint without guessing hidden state. Prefer small, testable units over sprawling scripts. When a step fails, the failure should point at a single responsibility rather than a tangled pipeline. Authenticate at the gateway and re-authorize at the data plane. A bearer token alone is not a tenancy boundary.
Structured Tool Output Handling — The Hallucinated Parameter Problem
For the Structured Tool Output Handling stage, define the inputs, the owner of the step, and the exit criteria before changing code. Operators should be able to re-run the step from a known checkpoint without guessing hidden state. Treat this stage as a contract between inputs and validated outputs. Name the artifacts, define success checks, and refuse silent partial completion. Authenticate at the gateway and re-authorize at the data plane. A bearer token alone is not a tenancy boundary. For the Structured Tool Output Handling stage, define the inputs, the owner of the step, and the exit criteria before changing code. Operators should be able to re-run the step from a known checkpoint without guessing hidden state. Keep configuration outside application code. Environment files, secret stores, and feature flags belong in one place operators can audit without reading the whole graph.
The Tool Call Retry and Fallback Architecture
When working through the The Tool Call Retry stage, write down the contract first: required inputs, success signal, and what happens on partial failure. That checklist keeps later code changes honest. Document the happy path and the recovery path together. Retries, human gates, and dead-letter handling are part of the product, not later polish. Log tool name, args hash, latency, and outcome for every call. Debugging agent loops without that trail wastes hours.
Tool Observability — Finding the Tools That Are Hurting
When working through the Tool Observability Finding the stage, write down the contract first: required inputs, success signal, and what happens on partial failure. That checklist keeps later code changes honest. Prefer small, testable units over sprawling scripts. When a step fails, the failure should point at a single responsibility rather than a tangled pipeline. Log tool name, args hash, latency, and outcome for every call. Debugging agent loops without that trail wastes hours.
The Code — Production Agent Tool Use System
When working through the The Code Production Agent stage, write down the contract first: required inputs, success signal, and what happens on partial failure. That checklist keeps later code changes honest. Treat this stage as a contract between inputs and validated outputs. Name the artifacts, define success checks, and refuse silent partial completion. Log tool name, args hash, latency, and outcome for every call. Debugging agent loops without that trail wastes hours.
"""
#50DaysOfAgenticAI — Day 41
Topic: Agent Tool Use and Function Calling in Production
Author: Maneesh Kumar | Azure AI Architect
Series: #50DaysOfAgenticAI on Medium & LinkedIn
Book: "From Prompts to Agentic AI: Building Agentic AI & Enterprise RAG Systems on Azure."
Kindle: https://www.amazon.in/Prompts-Agentic-AI-Building-Enterprise-ebook/dp/B0GRD8XTHH/
Paperback: https://www.amazon.in/dp/B0GTLDQSSW
Production tool use system covering:
1. Tool registry with dependency graph and minimum tool set enforcement
2. Parameter provenance tracker — verified vs generated parameter values
3. Pre-execution validation blocking tools with unverified write parameters
4. Three-tier retry architecture: transient, parameter-correction, fallback
5. Tool dependency graph resolver preventing redundant and unnecessary calls
6. Tool call observability: call rate, error rate, latency, cost per query
7. ReAct reasoning loop with structured tool selection justification
8. Tool result validator preventing hallucinated outputs
"""
import asyncio
import json
import logging
import time
from dataclasses import dataclass, field
from enum import Enum
from typing import Optional, Callable, Any
from openai import AzureOpenAI
# ─── Logging ──────────────────────────────────────────────────────────────────
logging.basicConfig(
level=logging.INFO,
format="%(asctime)s [%(levelname)s] %(name)s — %(message)s"
)
log = logging.getLogger("tool_use")
# ════════════════════════════════════════════════════════════════════════════════
# ENUMS
# ════════════════════════════════════════════════════════════════════════════════
class ParameterSource(str, Enum):
RETRIEVED = "retrieved" # From a prior tool call output
USER_PROVIDED = "user_provided" # Extracted from user message
CONVERSATION = "conversation" # From conversation history
GENERATED = "generated" # LLM generated — requires validation for write tools
SYSTEM = "system" # System-level constant
class ToolCategory(str, Enum):
READ_ONLY = "read_only" # Lookups, calculations, searches
WRITE = "write" # State-changing operations
NOTIFY = "notify" # Notifications, communications
ESCALATE = "escalate" # Routing to human systems
class ToolCallStatus(str, Enum):
SUCCESS = "success"
TRANSIENT_FAILURE = "transient_failure"
PARAMETER_ERROR = "parameter_error"
VALIDATION_BLOCKED = "validation_blocked"
FALLBACK_USED = "fallback_used"
ALL_RETRIES_FAILED = "all_retries_failed"
# ════════════════════════════════════════════════════════════════════════════════
# DATA STRUCTURES
# ════════════════════════════════════════════════════════════════════════════════
@dataclass
class ToolParameter:
"""Definition of one parameter in a tool's schema."""
name: str
type: str # "string", "number", "boolean", "object"
required: bool
description: str
example: Optional[Any] = None
@dataclass
class ToolDefinition:
"""
Complete definition of one tool available to the agent.
Includes the OpenAI function calling schema, metadata for dependency
resolution, and observability configuration.
"""
name: str
description: str
category: ToolCategory
parameters: list[ToolParameter]
depends_on: list[str] # Tool names that must be called first
fallback_tool: Optional[str] # Tool to use if this one fails
cost_per_call: float = 0.0 # External API cost in INR
timeout_ms: float = 2000.0
executor: Optional[Callable] = None
def to_openai_schema(self) -> dict:
"""Convert to OpenAI function calling schema."""
properties = {}
required = []
for param in self.parameters:
properties[param.name] = {
"type": param.type,
"description": param.description
}
if param.example is not None:
properties[param.name]["example"] = str(param.example)
if param.required:
required.append(param.name)
return {
"type": "function",
"function": {
"name": self.name,
"description": self.description,
"parameters": {
"type": "object",
"properties": properties,
"required": required
}
}
}
@dataclass
class ParameterValue:
"""A tool parameter value with its provenance."""
parameter_name: str
value: Any
source: ParameterSource
source_detail: str # e.g., "loan_lookup result field 'account_id'"
@dataclass
class ToolCallRecord:
"""Complete record of one tool call for observability."""
call_id: str
tool_name: str
parameters: dict
parameter_sources: list[ParameterValue]
status: ToolCallStatus
result: Optional[dict]
error: Optional[str]
latency_ms: float
retry_count: int
fallback_used: bool
cost_incurred: float
timestamp: float
@dataclass
class ToolExecutionPlan:
"""
The planned sequence of tool calls for one query.
Built by the dependency resolver before any calls are made.
"""
query: str
selected_tools: list[str]
execution_order: list[list[str]] # Groups that can run in parallel
justifications: dict[str, str] # tool_name → why it's needed
estimated_cost: float
estimated_latency: float
@dataclass
class AgentToolConfig:
azure_openai_endpoint: str
azure_openai_key: str
model: str = "gpt-5-mini"
api_version: str = "2025-01-01-preview"
max_tool_calls_per_turn: int = 5
max_retries_transient: int = 3
max_retries_parameter: int = 1
backoff_base_ms: float = 500.0
require_write_validation: bool = True
# ════════════════════════════════════════════════════════════════════════════════
# TOOL REGISTRY
# ════════════════════════════════════════════════════════════════════════════════
class ToolRegistry:
"""
Central registry of all tools available to the agent.
Provides tool lookup, dependency graph resolution, and schema generation.
"""
def __init__(self):
self._tools: dict[str, ToolDefinition] = {}
def register(self, tool: ToolDefinition) -> None:
"""Register a tool in the registry."""
self._tools[tool.name] = tool
log.info(f"[ToolRegistry] Registered: {tool.name} ({tool.category.value})")
def get(self, name: str) -> Optional[ToolDefinition]:
return self._tools.get(name)
def get_all(self) -> list[ToolDefinition]:
return list(self._tools.values())
def get_openai_tools_schema(self) -> list[dict]:
"""Return all tool schemas in OpenAI function calling format."""
return [tool.to_openai_schema() for tool in self._tools.values()]
def resolve_dependencies(self, selected_tools: list[str]) -> list[list[str]]:
"""
Given a list of selected tool names, return the execution order.
Tools with no dependencies can run in the first group.
Tools that depend on group 1 run in group 2, etc.
Returns a list of groups, where each group can run in parallel.
"""
# Build dependency-aware execution groups
resolved: list[list[str]] = []
remaining = list(selected_tools)
completed: set[str] = set()
max_rounds = len(selected_tools) + 1
rounds = 0
while remaining and rounds < max_rounds:
rounds += 1
ready = []
for tool_name in remaining:
tool = self._tools.get(tool_name)
if not tool:
continue
# Check if all dependencies are either in selected tools or already done
deps_satisfied = all(
dep in completed or dep not in selected_tools
for dep in tool.depends_on
)
if deps_satisfied:
ready.append(tool_name)
if ready:
resolved.append(ready)
completed.update(ready)
remaining = [t for t in remaining if t not in ready]
else:
# Circular dependency or missing dependency — add remaining as-is
resolved.append(remaining)
break
return resolved
def get_minimum_tool_set(
self,
required_information: list[str],
available_information: list[str]
) -> list[str]:
"""
Given a list of required information types and available information,
return the minimum set of tools needed to fill the gaps.
Each tool's description is matched against required information.
"""
information_gaps = [
info for info in required_information
if info not in available_information
]
if not information_gaps:
return []
needed_tools = []
for tool in self._tools.values():
tool_covers = any(
gap.lower() in tool.description.lower()
for gap in information_gaps
)
if tool_covers:
needed_tools.append(tool.name)
return needed_tools
# ════════════════════════════════════════════════════════════════════════════════
# PARAMETER PROVENANCE TRACKER
# ════════════════════════════════════════════════════════════════════════════════
class ParameterProvenanceTracker:
"""
Tracks the source of every parameter value used in tool calls.
Flags parameters sourced from LLM generation rather than retrieval.
The tracker maintains a session-level store of all values retrieved
from tool calls and user messages. When the agent fills a tool parameter,
the tracker checks whether the value came from the store or was generated.
"""
def __init__(self):
self._retrieved_values: dict[str, ParameterValue] = {} # key → ParameterValue
def record_retrieved(
self,
field_name: str,
value: Any,
source_tool: str,
source_detail: str = ""
) -> None:
"""Record a value retrieved from a tool call."""
key = f"{field_name}:{str(value)[:50]}"
self._retrieved_values[key] = ParameterValue(
parameter_name=field_name,
value=value,
source=ParameterSource.RETRIEVED,
source_detail=f"{source_tool}: {source_detail}"
)
def record_user_provided(
self,
field_name: str,
value: Any,
context: str = ""
) -> None:
"""Record a value provided directly by the user."""
key = f"{field_name}:{str(value)[:50]}"
self._retrieved_values[key] = ParameterValue(
parameter_name=field_name,
value=value,
source=ParameterSource.USER_PROVIDED,
source_detail=context
)
def assess_parameter(
self,
parameter_name: str,
value: Any,
tool_name: str
) -> ParameterValue:
"""
Assess whether a parameter value is verified or generated.
Returns the ParameterValue with source assessment.
"""
# Try exact match first
key = f"{parameter_name}:{str(value)[:50]}"
if key in self._retrieved_values:
return self._retrieved_values[key]
# Try matching by field name
for stored_key, stored_val in self._retrieved_values.items():
if stored_key.startswith(f"{parameter_name}:"):
return stored_val
# Try matching by value across any field
str_value = str(value)
for stored_key, stored_val in self._retrieved_values.items():
if str(stored_val.value)[:50] == str_value[:50]:
return ParameterValue(
parameter_name=parameter_name,
value=value,
source=stored_val.source,
source_detail=f"Matched by value to: {stored_val.source_detail}"
)
# Not found — mark as generated
log.warning(
f"[Provenance] Parameter '{parameter_name}'='{str(value)[:30]}' "
f"for tool '{tool_name}' not found in retrieved values — marking GENERATED"
)
return ParameterValue(
parameter_name=parameter_name,
value=value,
source=ParameterSource.GENERATED,
source_detail="Not found in retrieved or user-provided values"
)
def has_verified_value(self, field_name: str) -> bool:
"""Check whether a verified value exists for a field."""
return any(
key.startswith(f"{field_name}:")
for key in self._retrieved_values
)
# ════════════════════════════════════════════════════════════════════════════════
# PRE-EXECUTION VALIDATOR
# ════════════════════════════════════════════════════════════════════════════════
class PreExecutionValidator:
"""
Validates tool call parameters before execution.
For write and notify tools: blocks calls with any GENERATED required parameter.
For read-only tools: allows GENERATED parameters (worst case is a failed lookup).
"""
def __init__(self, config: AgentToolConfig):
self.config = config
def validate(
self,
tool: ToolDefinition,
parameters: dict,
provenance: list[ParameterValue]
) -> tuple[bool, str]:
"""
Validate that tool parameters are safe to execute.
Returns (is_valid, reason) tuple.
"""
if not self.config.require_write_validation:
return True, "Validation disabled"
# Read-only tools: allow generated parameters
if tool.category == ToolCategory.READ_ONLY:
return True, "Read-only tool — generated parameters permitted"
# Write/notify/escalate tools: block generated required parameters
required_param_names = {p.name for p in tool.parameters if p.required}
provenance_map = {pv.parameter_name: pv for pv in provenance}
for param_name in required_param_names:
pv = provenance_map.get(param_name)
if pv and pv.source == ParameterSource.GENERATED:
return False, (
f"Required parameter '{param_name}' for {tool.category.value} tool "
f"'{tool.name}' has GENERATED source. "
f"Retrieve '{param_name}' before calling this tool."
)
return True, "All required parameters verified"
# ════════════════════════════════════════════════════════════════════════════════
# RETRY MANAGER
# ════════════════════════════════════════════════════════════════════════════════
class ToolRetryManager:
"""
Implements the three-tier retry architecture for tool call failures.
Tier 1: Transient failure retry with exponential backoff
Tier 2: Parameter correction retry (one attempt after validation failure)
Tier 3: Fallback tool substitution
"""
def __init__(self, config: AgentToolConfig, registry: ToolRegistry):
self.config = config
self.registry = registry
async def execute_with_retry(
self,
tool: ToolDefinition,
parameters: dict,
executor: Callable
) -> tuple[Optional[dict], ToolCallStatus, int]:
"""
Execute a tool with the full retry architecture.
Returns (result, status, retry_count).
"""
retry_count = 0
# Tier 1: Transient failure retry
for attempt in range(self.config.max_retries_transient + 1):
try:
result = await asyncio.wait_for(
executor(parameters),
timeout=tool.timeout_ms / 1000
)
return result, ToolCallStatus.SUCCESS, retry_count
except asyncio.TimeoutError:
retry_count += 1
log.warning(
f"[Retry] {tool.name} timeout (attempt {attempt + 1}/"
f"{self.config.max_retries_transient + 1})"
)
if attempt < self.config.max_retries_transient:
backoff = self.config.backoff_base_ms * (2 ** attempt) / 1000
await asyncio.sleep(backoff)
except ValueError as e:
# Parameter error — don't retry with same params
log.warning(f"[Retry] {tool.name} parameter error: {e}")
return None, ToolCallStatus.PARAMETER_ERROR, retry_count
except Exception as e:
error_str = str(e).lower()
if "timeout" in error_str or "connection" in error_str or "503" in error_str:
retry_count += 1
if attempt < self.config.max_retries_transient:
backoff = self.config.backoff_base_ms * (2 ** attempt) / 1000
log.warning(
f"[Retry] {tool.name} transient error: {e} | "
f"Retrying in {backoff:.0f}ms"
)
await asyncio.sleep(backoff)
continue
else:
log.error(f"[Retry] {tool.name} non-retryable error: {e}")
return None, ToolCallStatus.TRANSIENT_FAILURE, retry_count
# Tier 3: Fallback tool
if tool.fallback_tool:
fallback_def = self.registry.get(tool.fallback_tool)
if fallback_def and fallback_def.executor:
log.info(
f"[Retry] Falling back to {tool.fallback_tool} "
f"for failed {tool.name}"
)
try:
fallback_result = await asyncio.wait_for(
fallback_def.executor(parameters),
timeout=fallback_def.timeout_ms / 1000
)
return fallback_result, ToolCallStatus.FALLBACK_USED, retry_count
except Exception as e:
log.error(f"[Retry] Fallback {tool.fallback_tool} also failed: {e}")
return None, ToolCallStatus.ALL_RETRIES_FAILED, retry_count
# ════════════════════════════════════════════════════════════════════════════════
# TOOL OBSERVABILITY TRACKER
# ════════════════════════════════════════════════════════════════════════════════
class ToolObservabilityTracker:
"""
Tracks per-tool metrics across all requests.
Provides call rate, error rate, latency, and cost analytics.
"""
def __init__(self):
self._records: list[ToolCallRecord] = []
def record(self, record: ToolCallRecord) -> None:
self._records.append(record)
def get_metrics_per_tool(self) -> dict:
"""Compute aggregate metrics per tool."""
if not self._records:
return {}
tool_data: dict[str, list[ToolCallRecord]] = {}
for r in self._records:
tool_data.setdefault(r.tool_name, []).append(r)
metrics = {}
total_queries = max(
len(set(r.call_id.split("_")[0] for r in self._records)), 1
)
for tool_name, records in tool_data.items():
total_calls = len(records)
success = sum(1 for r in records if r.status == ToolCallStatus.SUCCESS)
errors = sum(1 for r in records if r.status in (
ToolCallStatus.TRANSIENT_FAILURE,
ToolCallStatus.ALL_RETRIES_FAILED,
ToolCallStatus.PARAMETER_ERROR
))
blocked = sum(1 for r in records if r.status == ToolCallStatus.VALIDATION_BLOCKED)
total_cost = sum(r.cost_incurred for r in records)
avg_latency = sum(r.latency_ms for r in records) / total_calls
generated_params = sum(
1 for r in records
if any(pv.source == ParameterSource.GENERATED for pv in r.parameter_sources)
)
metrics[tool_name] = {
"total_calls": total_calls,
"call_rate": round(total_calls / total_queries, 2),
"success_rate": round(success / max(total_calls, 1), 3),
"error_rate": round(errors / max(total_calls, 1), 3),
"validation_block_rate": round(blocked / max(total_calls, 1), 3),
"generated_param_rate": round(generated_params / max(total_calls, 1), 3),
"avg_latency_ms": round(avg_latency, 1),
"total_cost_inr": round(total_cost, 2),
"cost_per_call_inr": round(total_cost / max(total_calls, 1), 2),
}
return metrics
def get_cost_savings_opportunities(self, call_rate_threshold: float = 0.50) -> list[dict]:
"""
Identify tools that appear to be over-called based on call rate.
Tools called more than threshold per query are candidates for optimisation.
"""
metrics = self.get_metrics_per_tool()
opportunities = []
for tool_name, m in metrics.items():
if m["call_rate"] > call_rate_threshold:
opportunities.append({
"tool": tool_name,
"current_call_rate": m["call_rate"],
"threshold": call_rate_threshold,
"total_cost_inr": m["total_cost_inr"],
"potential_saving_inr": round(
m["total_cost_inr"] *
(1 - call_rate_threshold / m["call_rate"]), 2
),
"recommendation": (
f"Call rate {m['call_rate']:.0%} exceeds threshold {call_rate_threshold:.0%}. "
f"Review tool selection justification for unnecessary calls."
)
})
return sorted(opportunities, key=lambda x: -x["potential_saving_inr"])
def get_alerts(self) -> list[str]:
"""Generate observability alerts for metrics exceeding thresholds."""
metrics = self.get_metrics_per_tool()
alerts = []
for tool_name, m in metrics.items():
if m["call_rate"] > 0.70:
alerts.append(
f"⚠️ {tool_name}: Call rate {m['call_rate']:.0%} — "
f"possible over-calling"
)
if m["error_rate"] > 0.10:
alerts.append(
f"🔴 {tool_name}: Error rate {m['error_rate']:.0%} — "
f"tool reliability issue"
)
if m["generated_param_rate"] > 0.05:
alerts.append(
f"🔴 {tool_name}: {m['generated_param_rate']:.0%} calls use "
f"generated parameters — provenance gap"
)
return alerts
# ════════════════════════════════════════════════════════════════════════════════
# REACT REASONING LOOP WITH TOOL USE
# ════════════════════════════════════════════════════════════════════════════════
class ReActAgentWithToolUse:
"""
ReAct (Reason + Act) agent with full tool use production infrastructure.
Each iteration:
1. Reason: LLM determines next action with justification
2. Plan: validate tool selection against minimum tool set principle
3. Validate: check parameter provenance for write/notify tools
4. Execute: call tool with retry architecture
5. Observe: record result and update provenance tracker
6. Repeat or respond
"""
SYSTEM_PROMPT = """You are a financial services AI assistant with access to banking tools.
When using tools:
1. Only call a tool when you genuinely NEED information it provides
2. Justify each tool call: what specific information does it provide that you don't already have?
3. Use information from prior tool results rather than calling the same tool again
4. Never call the bureau query tool unless credit eligibility assessment is specifically required
5. For notification tools: only call after you have retrieved the recipient's contact details
Think step by step before calling any tool."""
TOOL_SELECTION_PROMPT = """Given the user query and the tools available, determine:
1. Which tools are NECESSARY (not just potentially useful) to answer this query?
2. For each necessary tool, what specific information does it provide that cannot be obtained otherwise?
Query: {query}
Available tools: {tools}
Current available information: {available_info}
Return ONLY valid JSON:
{{"necessary_tools": ["tool_name_1", ...],
"justifications": {{"tool_name": "why this specific tool is necessary"}},
"can_answer_without_retrieval": true/false,
"direct_answer": "if can_answer_without_retrieval, provide the answer"}}"""
def __init__(
self,
config: AgentToolConfig,
registry: ToolRegistry
):
self.config = config
self.client = AzureOpenAI(
azure_endpoint=config.azure_openai_endpoint,
api_key=config.azure_openai_key,
api_version=config.api_version
)
self.registry = registry
self.validator = PreExecutionValidator(config)
self.retry_mgr = ToolRetryManager(config, registry)
self.obs_tracker = ToolObservabilityTracker()
self.provenance = ParameterProvenanceTracker()
async def _plan_tool_calls(
self,
query: str,
available_info: dict
) -> dict:
"""Determine necessary tools using the minimum tool set principle."""
tool_descriptions = "\n".join([
f"- {t.name}: {t.description} [category: {t.category.value}, cost: ₹{t.cost_per_call}]"
for t in self.registry.get_all()
])
available_str = json.dumps({k: v for k, v in available_info.items() if v is not None})
try:
response = self.client.chat.completions.create(
model=self.config.model,
messages=[
{"role": "system", "content": self.SYSTEM_PROMPT},
{"role": "user", "content": self.TOOL_SELECTION_PROMPT.format(
query=query,
tools=tool_descriptions,
available_info=available_str or "None"
)}
],
temperature=0,
max_tokens=400,
response_format={"type": "json_object"}
)
return json.loads(response.choices[0].message.content)
except Exception as e:
log.error(f"[ReAct] Tool planning failed: {e}")
return {"necessary_tools": [], "justifications": {}, "can_answer_without_retrieval": True}
async def _execute_tool(
self,
tool_name: str,
parameters: dict,
query_id: str
) -> ToolCallRecord:
"""Execute one tool call with validation, retry, and observability."""
tool = self.registry.get(tool_name)
start = time.time()
if not tool:
return ToolCallRecord(
call_id=f"{query_id}_{tool_name}",
tool_name=tool_name,
parameters=parameters,
parameter_sources=[],
status=ToolCallStatus.ALL_RETRIES_FAILED,
result=None,
error=f"Tool '{tool_name}' not found in registry",
latency_ms=0,
retry_count=0,
fallback_used=False,
cost_incurred=0.0,
timestamp=time.time()
)
# Assess parameter provenance
param_sources = [
self.provenance.assess_parameter(param_name, value, tool_name)
for param_name, value in parameters.items()
]
# Pre-execution validation for write/notify tools
is_valid, validation_reason = self.validator.validate(
tool, parameters, param_sources
)
if not is_valid:
log.warning(
f"[ReAct] Tool call BLOCKED: {tool_name} — {validation_reason}"
)
record = ToolCallRecord(
call_id=f"{query_id}_{tool_name}",
tool_name=tool_name,
parameters=parameters,
parameter_sources=param_sources,
status=ToolCallStatus.VALIDATION_BLOCKED,
result=None,
error=validation_reason,
latency_ms=(time.time() - start) * 1000,
retry_count=0,
fallback_used=False,
cost_incurred=0.0,
timestamp=time.time()
)
self.obs_tracker.record(record)
return record
# Execute with retry architecture
if not tool.executor:
# Mock execution for demo
async def mock_executor(params):
await asyncio.sleep(0.05)
return self._mock_tool_result(tool_name, params)
executor = mock_executor
else:
executor = tool.executor
result, status, retry_count = await self.retry_mgr.execute_with_retry(
tool, parameters, executor
)
latency_ms = (time.time() - start) * 1000
# Update provenance tracker with results
if result:
for field_name, value in result.items():
self.provenance.record_retrieved(
field_name=field_name,
value=value,
source_tool=tool_name,
source_detail=f"result.{field_name}"
)
cost = tool.cost_per_call if status != ToolCallStatus.VALIDATION_BLOCKED else 0.0
record = ToolCallRecord(
call_id=f"{query_id}_{tool_name}",
tool_name=tool_name,
parameters=parameters,
parameter_sources=param_sources,
status=status,
result=result,
error=None if result else f"Tool failed after {retry_count} retries",
latency_ms=latency_ms,
retry_count=retry_count,
fallback_used=(status == ToolCallStatus.FALLBACK_USED),
cost_incurred=cost,
timestamp=time.time()
)
self.obs_tracker.record(record)
log.info(
f"[ReAct] {tool_name}: {status.value} | "
f"{latency_ms:.0f}ms | ₹{cost:.2f} | "
f"retries={retry_count}"
)
return record
def _mock_tool_result(self, tool_name: str, params: dict) -> dict:
"""Mock tool results for demo."""
mocks = {
"get_loan_status": {
"account_id": params.get("account_id", "LA4421"),
"account_holder": "Priya Sharma",
"outstanding": 4235000,
"next_emi_date": "2026-05-05",
"emi_amount": 45000,
"status": "Active",
"phone_masked": "+91-98XXXXX123" # Masked for privacy
},
"calculate_emi": {
"emi_amount": params.get("emi", 45000),
"principal": params.get("principal", 5000000),
"total_interest": 2100000,
"total_payment": 7100000
},
"fetch_bureau_score": {
"bureau_score": 756,
"credit_history": "Good",
"payment_history": "Consistent",
"utilisation": 0.32
},
"query_policy_docs": {
"content": "Prepayment of home loans carries no penalty for floating rate loans under RBI guidelines.",
"source": "RBI Master Circular 2024-HC-001",
"confidence": 0.94
}
}
return mocks.get(tool_name, {"status": "ok", "data": "mock result"})
async def run(
self,
user_query: str,
session_context: dict = None
) -> dict:
"""
Run the full ReAct tool use loop for one user query.
Returns the final answer with tool execution metadata.
"""
query_id = f"q_{int(time.time())}"
available_info = session_context or {}
all_records: list[ToolCallRecord] = []
total_cost = 0.0
log.info(f"\n[ReAct] Processing: '{user_query}'")
# Step 1: Plan tool calls using minimum tool set principle
plan = await self._plan_tool_calls(user_query, available_info)
if plan.get("can_answer_without_retrieval"):
log.info(f"[ReAct] Answering from context — no retrieval needed")
return {
"answer": plan.get("direct_answer", ""),
"tools_called": [],
"total_cost": 0.0,
"tool_records": []
}
necessary_tools = plan.get("necessary_tools", [])
justifications = plan.get("justifications", {})
log.info(
f"[ReAct] Planned tools: {necessary_tools} | "
f"Skipping: {[t.name for t in self.registry.get_all() if t.name not in necessary_tools]}"
)
# Step 2: Resolve execution order
execution_groups = self.registry.resolve_dependencies(necessary_tools)
log.info(f"[ReAct] Execution order: {execution_groups}")
# Step 3: Execute tools in dependency order (parallel within groups)
tool_results = {}
for group in execution_groups:
group_tasks = []
for tool_name in group:
tool = self.registry.get(tool_name)
if not tool:
continue
# Build parameters from available information
params = self._build_parameters(tool, available_info, tool_results)
group_tasks.append(self._execute_tool(tool_name, params, query_id))
if group_tasks:
group_records = await asyncio.gather(*group_tasks)
for record in group_records:
all_records.append(record)
total_cost += record.cost_incurred
if record.result:
tool_results[record.tool_name] = record.result
available_info.update(record.result)
# Step 4: Generate final answer using tool results
context = json.dumps(tool_results, indent=2, default=str)
try:
response = self.client.chat.completions.create(
model=self.config.model,
messages=[
{"role": "system", "content": self.SYSTEM_PROMPT},
{"role": "user", "content": (
f"Query: {user_query}\n\n"
f"Retrieved information:\n{context}\n\n"
f"Answer the query using only the retrieved information."
)}
],
temperature=0.1,
max_tokens=300
)
answer = response.choices[0].message.content.strip()
except Exception as e:
log.error(f"[ReAct] Final generation failed: {e}")
answer = f"Unable to generate response: {e}"
return {
"answer": answer,
"tools_called": [r.tool_name for r in all_records],
"tools_skipped": [t.name for t in self.registry.get_all()
if t.name not in [r.tool_name for r in all_records]],
"justifications": justifications,
"total_cost_inr": round(total_cost, 2),
"tool_records": all_records
}
def _build_parameters(
self,
tool: ToolDefinition,
available: dict,
prior_results: dict
) -> dict:
"""Build tool parameters from available context."""
params = {}
all_available = {**available, **{k: v for d in prior_results.values() for k, v in d.items()}}
for param in tool.parameters:
# Try to find the value in available context
if param.name in all_available:
params[param.name] = all_available[param.name]
elif param.example is not None:
params[param.name] = param.example
return params
# ════════════════════════════════════════════════════════════════════════════════
# DEMO — Building the Tool Registry and Running Queries
# ════════════════════════════════════════════════════════════════════════════════
async def demo():
"""
Demonstrates the production tool use system on four queries:
1. Simple balance query (should use loan_status only, NOT bureau)
2. Eligibility query (legitimately needs bureau score)
3. Notification with masked phone (should be blocked by validation)
4. Policy question (no retrieval needed — parametric knowledge)
"""
config = AgentToolConfig(
azure_openai_endpoint="https://your-resource.openai.azure.com/",
azure_openai_key="your-key",
require_write_validation=True
)
# Build the tool registry
registry = ToolRegistry()
registry.register(ToolDefinition(
name="get_loan_status",
description="Retrieves current loan account status, outstanding balance, next EMI date, and account holder details for a specific loan account",
category=ToolCategory.READ_ONLY,
parameters=[
ToolParameter("account_id", "string", True, "Loan account ID (e.g. LA4421)", "LA4421")
],
depends_on=[],
fallback_tool=None,
cost_per_call=0.50
))
registry.register(ToolDefinition(
name="calculate_emi",
description="Calculates EMI for given principal, interest rate and tenure. Does NOT require bureau data.",
category=ToolCategory.READ_ONLY,
parameters=[
ToolParameter("principal", "number", True, "Loan principal in INR", 5000000),
ToolParameter("rate", "number", True, "Annual interest rate as decimal", 0.085),
ToolParameter("months", "number", True, "Loan tenure in months", 240)
],
depends_on=[],
fallback_tool=None,
cost_per_call=0.0
))
registry.register(ToolDefinition(
name="fetch_bureau_score",
description="Retrieves credit bureau score, payment history, and credit utilisation for eligibility assessment. Use ONLY when credit eligibility needs to be assessed. Do NOT call for balance queries, EMI calculations, or policy questions.",
category=ToolCategory.READ_ONLY,
parameters=[
ToolParameter("customer_id", "string", True, "Customer ID", "CUST_001"),
ToolParameter("pan", "string", True, "PAN card number", "ABCDE1234F")
],
depends_on=[],
fallback_tool=None,
cost_per_call=8.0 # ₹8 per bureau pull
))
registry.register(ToolDefinition(
name="send_notification",
description="Sends SMS or WhatsApp notification to a customer. Requires verified phone number — do NOT use generated phone numbers.",
category=ToolCategory.NOTIFY,
parameters=[
ToolParameter("phone_number", "string", True, "Verified customer phone number", None),
ToolParameter("message", "string", True, "Notification message text", None),
ToolParameter("channel", "string", True, "sms or whatsapp", "sms")
],
depends_on=["get_loan_status"], # Must retrieve customer details first
fallback_tool=None,
cost_per_call=0.30
))
registry.register(ToolDefinition(
name="query_policy_docs",
description="Searches policy documents and regulatory guidelines for product terms, RBI circulars, and lending policies.",
category=ToolCategory.READ_ONLY,
parameters=[
ToolParameter("query", "string", True, "Search query for policy information", None)
],
depends_on=[],
fallback_tool=None,
cost_per_call=0.10
))
agent = ReActAgentWithToolUse(config, registry)
print("\n" + "="*65)
print("AGENT TOOL USE PRODUCTION DEMO")
print("="*65)
# Test queries
test_queries = [
{
"query": "What is the current outstanding balance on my home loan LA4421?",
"context": {"account_id": "LA4421", "customer_id": "CUST_001"},
"expect": "Should use get_loan_status ONLY — bureau call is unnecessary"
},
{
"query": "I want to apply for a new personal loan of ₹5 lakh. Am I eligible?",
"context": {"customer_id": "CUST_001", "pan": "ABCDE1234F"},
"expect": "Should use fetch_bureau_score — eligibility assessment genuinely needs it"
},
{
"query": "What does RBI say about prepayment charges on floating rate home loans?",
"context": {},
"expect": "Should use query_policy_docs or answer directly — no bureau needed"
},
]
total_sessions_cost = 0.0
total_bureau_calls = 0
for i, test in enumerate(test_queries, 1):
print(f"\n[Query {i}] {test['query'][:65]}")
print(f" Expected: {test['expect']}")
# Pre-seed provenance tracker with user-provided context
for key, value in test["context"].items():
agent.provenance.record_user_provided(key, value, "user_context")
result = await agent.run(test["query"], dict(test["context"]))
bureau_called = "fetch_bureau_score" in result["tools_called"]
total_bureau_calls += 1 if bureau_called else 0
total_sessions_cost += result["total_cost_inr"]
print(f"\n Tools called: {result['tools_called'] or ['none (parametric)']}")
print(f" Tools skipped: {result['tools_skipped'][:3]}")
print(f" Bureau called: {'YES ⚠️' if bureau_called else 'No ✅'}")
print(f" Total cost: ₹{result['total_cost_inr']:.2f}")
print(f" Answer preview: {result['answer'][:100]}...")
if result["tool_records"]:
print(f"\n Tool Records:")
for rec in result["tool_records"]:
status_icon = "✅" if rec.status == ToolCallStatus.SUCCESS else (
"🚫" if rec.status == ToolCallStatus.VALIDATION_BLOCKED else "❌"
)
print(
f" {status_icon} {rec.tool_name}: {rec.status.value} | "
f"{rec.latency_ms:.0f}ms | ₹{rec.cost_incurred:.2f}"
)
if rec.status == ToolCallStatus.VALIDATION_BLOCKED:
print(f" BLOCKED: {rec.error[:80]}")
# Reset provenance for next query
agent.provenance = ParameterProvenanceTracker()
# Observability summary
print(f"\n{'='*65}")
print("[Tool Observability Summary]")
metrics = agent.obs_tracker.get_metrics_per_tool()
for tool_name, m in metrics.items():
alert = " ⚠️ OVER-CALLED" if m["call_rate"] > 0.50 else ""
print(
f" {tool_name:<25} "
f"calls/query={m['call_rate']:.0%} "
f"cost=₹{m['total_cost_inr']:.2f} "
f"latency={m['avg_latency_ms']:.0f}ms"
f"{alert}"
)
opportunities = agent.obs_tracker.get_cost_savings_opportunities(0.50)
if opportunities:
print(f"\n[Cost Savings Opportunities]")
for opp in opportunities:
print(f" {opp['tool']}: save ₹{opp['potential_saving_inr']:.2f} | {opp['recommendation'][:70]}")
alerts = agent.obs_tracker.get_alerts()
if alerts:
print(f"\n[Observability Alerts]")
for alert in alerts:
print(f" {alert}")
print(f"\n Total session cost: ₹{total_sessions_cost:.2f}")
print(f" Bureau calls (should be 1 of 3): {total_bureau_calls}/3")
# Deep dive in "From Prompts to Agentic AI: Building Agentic AI & Enterprise RAG Systems on Azure."
# Kindle: https://www.amazon.in/Prompts-Agentic-AI-Building-Enterprise-ebook/dp/B0GRD8XTHH/
# Paperback: https://www.amazon.in/dp/B0GTLDQSSW
if __name__ == "__main__":
asyncio.run(demo())
What Just Happened — Plain English
When working through the What Just Happened Plain stage, write down the contract first: required inputs, success signal, and what happens on partial failure. That checklist keeps later code changes honest. Record timings and token or query cost next to functional results. Cost visibility early prevents surprise bills when the path moves from demo to shared environments. Log tool name, args hash, latency, and outcome for every call. Debugging agent loops without that trail wastes hours.
The Tool Description Problem — How Description Quality Drives Selection Quality
When working through the The Tool Description Problem stage, write down the contract first: required inputs, success signal, and what happens on partial failure. That checklist keeps later code changes honest. Keep configuration outside application code. Environment files, secret stores, and feature flags belong in one place operators can audit without reading the whole graph. Log tool name, args hash, latency, and outcome for every call. Debugging agent loops without that trail wastes hours.
Real-World Enterprise Story
When working through the Real-World Enterprise Story stage, write down the contract first: required inputs, success signal, and what happens on partial failure. That checklist keeps later code changes honest. Document the happy path and the recovery path together. Retries, human gates, and dead-letter handling are part of the product, not later polish. Log tool name, args hash, latency, and outcome for every call. Debugging agent loops without that trail wastes hours.
Going Deeper
When working through the Going Deeper stage, write down the contract first: required inputs, success signal, and what happens on partial failure. That checklist keeps later code changes honest. Prefer small, testable units over sprawling scripts. When a step fails, the failure should point at a single responsibility rather than a tangled pipeline. Log tool name, args hash, latency, and outcome for every call. Debugging agent loops without that trail wastes hours.
Operational checklist
When working through the Operational checklist stage, write down the contract first: required inputs, success signal, and what happens on partial failure. That checklist keeps later code changes honest.
Record timings and token or query cost next to functional results. Cost visibility early prevents surprise bills when the path moves from demo to shared environments.
Log tool name, args hash, latency, and outcome for every call. Debugging agent loops without that trail wastes hours.
Keep graph state flat and typed. Nested blobs hide which node wrote which field and break resume after interrupts.
Add a smoke test that exercises the critical path in CI with fixtures, not live paid APIs, whenever budgets allow.
Prefer small, testable units over sprawling scripts. When a step fails, the failure should point at a single responsibility rather than a tangled pipeline.
Before promoting the stack, freeze versions, capture a golden transcript for the critical path, and confirm rollback steps. Shared environments need rate limits, tenancy checks, and a clear owner for secret rotation. Prefer boring reliability over clever one-off demos.
Batch note for e491f945eee7: keep provider keys out of the repo, set a per-session token ceiling, and store transcripts next to the eval fixtures so later model swaps stay comparable.
The hardening note 0 stage works best when treated as a measurable surface. Capture one golden transcript, one failure case, and the rollback note before expanding scope. Prefer small, testable units over sprawling scripts. When a step fails, the failure should point at a single responsibility rather than a tangled pipeline.
Hardening detail 0/881: measure wall time, error class, and token spend for this note, then decide whether to keep the change based on a fixed question set rather than anecdote.
For the hardening note 1 stage, define the inputs, the owner of the step, and the exit criteria before changing code. Operators should be able to re-run the step from a known checkpoint without guessing hidden state. Record timings and token or query cost next to functional results. Cost visibility early prevents surprise bills when the path moves from demo to shared environments.
Hardening detail 1/881: measure wall time, error class, and token spend for this note, then decide whether to keep the change based on a fixed question set rather than anecdote.
When working through the hardening note 2 stage, write down the contract first: required inputs, success signal, and what happens on partial failure. That checklist keeps later code changes honest. Document the happy path and the recovery path together. Retries, human gates, and dead-letter handling are part of the product, not later polish.
Hardening detail 2/881: measure wall time, error class, and token spend for this note, then decide whether to keep the change based on a fixed question set rather than anecdote.
The hardening note 3 stage works best when treated as a measurable surface. Capture one golden transcript, one failure case, and the rollback note before expanding scope. Treat this stage as a contract between inputs and validated outputs. Name the artifacts, define success checks, and refuse silent partial completion.
Hardening detail 3/881: measure wall time, error class, and token spend for this note, then decide whether to keep the change based on a fixed question set rather than anecdote.
For the hardening note 4 stage, define the inputs, the owner of the step, and the exit criteria before changing code. Operators should be able to re-run the step from a known checkpoint without guessing hidden state. Keep configuration outside application code. Environment files, secret stores, and feature flags belong in one place operators can audit without reading the whole graph.
Hardening detail 4/881: measure wall time, error class, and token spend for this note, then decide whether to keep the change based on a fixed question set rather than anecdote.
When working through the hardening note 5 stage, write down the contract first: required inputs, success signal, and what happens on partial failure. That checklist keeps later code changes honest. Prefer small, testable units over sprawling scripts. When a step fails, the failure should point at a single responsibility rather than a tangled pipeline.
Hardening detail 5/881: measure wall time, error class, and token spend for this note, then decide whether to keep the change based on a fixed question set rather than anecdote.
The hardening note 6 stage works best when treated as a measurable surface. Capture one golden transcript, one failure case, and the rollback note before expanding scope. Record timings and token or query cost next to functional results. Cost visibility early prevents surprise bills when the path moves from demo to shared environments.
Hardening detail 6/881: measure wall time, error class, and token spend for this note, then decide whether to keep the change based on a fixed question set rather than anecdote.
For the hardening note 7 stage, define the inputs, the owner of the step, and the exit criteria before changing code. Operators should be able to re-run the step from a known checkpoint without guessing hidden state. Document the happy path and the recovery path together. Retries, human gates, and dead-letter handling are part of the product, not later polish.
Hardening detail 7/881: measure wall time, error class, and token spend for this note, then decide whether to keep the change based on a fixed question set rather than anecdote.
When working through the hardening note 8 stage, write down the contract first: required inputs, success signal, and what happens on partial failure. That checklist keeps later code changes honest. Treat this stage as a contract between inputs and validated outputs. Name the artifacts, define success checks, and refuse silent partial completion.
Hardening detail 8/881: measure wall time, error class, and token spend for this note, then decide whether to keep the change based on a fixed question set rather than anecdote.
The hardening note 9 stage works best when treated as a measurable surface. Capture one golden transcript, one failure case, and the rollback note before expanding scope. Keep configuration outside application code. Environment files, secret stores, and feature flags belong in one place operators can audit without reading the whole graph.
Hardening detail 9/881: measure wall time, error class, and token spend for this note, then decide whether to keep the change based on a fixed question set rather than anecdote.
For the hardening note 10 stage, define the inputs, the owner of the step, and the exit criteria before changing code. Operators should be able to re-run the step from a known checkpoint without guessing hidden state. Prefer small, testable units over sprawling scripts. When a step fails, the failure should point at a single responsibility rather than a tangled pipeline.
Hardening detail 10/881: measure wall time, error class, and token spend for this note, then decide whether to keep the change based on a fixed question set rather than anecdote.