The Vernam cipher is a system where the keyword is as long as the plaintext and has no statistical relationship to it. We work on binary data (bits) rather than letters using XOR:

XOR can be used as a poly-alphabetic cipher:

This is the basis of the idea of the Vernam cipher, we use a long running loop of tape that eventually repeats the key (very long but repeating keyword). Ciphertext is generated by bitwise XOR of plaintext and key, decryption is the same bitwise operation.