Traditionally, compilers optimize a program procedure by procedure, or at best compilation unit per compilation unit. Whole program optimization (WPO) means that the compiler considers all compilation units that make up a program or library and optimizes them using the combined knowledge of how they are used together in this particular case.
The way WPO generally works is as follows:
This is the scheme followed by Free Pascal.
The implementation of this scheme is highly compiler dependent. Another implementation could be that the compiler generates some kind of intermediary code (e.g., byte code) and the linker performs all wpo along with the translation to the target machine code