This study focuses on the idle space within a warehouse which arises due to an inadequate identification of optimum materials, hindering their storage and reuse. Herein, an on-demand warehousing model is developed based on knowledge management, ideal design of warehouse facilities, and continuous monitoring of warehouse processes and activities for achieving an adequate material flow, cost minimization, high customer service levels, and better working conditions. Results show that the developed model reduced the idle warehouse space and operating costs by 72.14% and 58.55%, respectively.