James Gunn explains on Twitter that the headpiece is the part that actually picks up the sound of Yondu’s whistle, which it then translates into control of the yaka arrow wirelessly.
In the film, Yondu’s headpiece is damaged, and without it, he no longer has control of the arrow.
We gained a great deal of additional information about Yondu’s arrow in Guardians of the Galaxy Vol. 2.
The wireless range of the headpiece is quite significant, as we see the arrow traveling all over the place in both movies, taking out everybody in the blink of an eye.