Trace the shape of the inlay onto the inlay material with your scribe or X-acto knife. Place the inlay material into a vice and cut out the shape with a scroll saw if you're cutting wood, or use a coping saw if you're using another material, such as mother of pearl.
File the edges of the inlay material smooth using a fine-tooth file or fine-grit sandpaper. Remove all rough edges before going on to the next step.
Place the inlay onto the furniture, and trace around the edge of the inlay with the scribe. Move the inlay material aside. Cut a cavity into the furniture with the rotary tool at a depth slightly less than the thickness of the inlay, staying as close to the scribed line as possible.
Place a thin coat of wood glue into the base of the cavity and insert the inlay, pressing it into place. Put a piece of painter’s tape over the inlay to hold it in the cavity while the glue dries. Allow the glue to cure for 24 hours, then remove the tape.
Scrape the inlay flush with the surface of the furniture with the metal scraper, or sand the surface of the inlay material flat with a block sander. Fill in all gaps between the inlay material and the furniture with engraver’s putty and scrape or sand it flat after the putty has dried.