A method for implementing on-demand configuration of a logical volume, wherein the method monitors the amount of available storage capacity of the logical storage volume and determines whether the available storage capacity exceeds a predetermined threshold, such as a percentage of available logical storage space. If the method determines that the storage capacity of the logical storage volume is nearing full capacity, the method determines whether configured physical storage space is available. If the method determines that configured physical storage space is available, the method then reconfigures the logical storage volume to include the configured physical storage space. If configured physical storage space is not available, the method locates unconfigured physical storage space, configures the available physical storage space, and reconfigures the logical volume using the configured physical storage space.