For making yarn with wisps or tufts, there are 3 methods: Chenille, Feather-yarn or Frisé.

Chenille yarn can be woven by using a leno weave structure. Weft threads are fixed between twisting two warp threads. The space between the weft threads is kept free, later to be cut through determining the length of the tufts.
Feather yarn is machine-made by hooking the feed of the effect thread with 1 or 2 other threads.

Frisé yarn is a twine effect in which 2 threads that are over-coiled/twisted, are twined, causing them to curl together the moment the tension on the thread is released.