This is a jig I designed to be able to use the router to cut dados into the side of turnings that could then be filled with a contrasting wood inlay. I used the Porter-Cable trim router for my power unit, so adjust the plans to fit your router. PDF here.
A cleat is screwed to the bottom to use as a guide for straight cuts.
A dowel was mounted with the base screws to use to make flutes around a profile to adjusted depth, set the bit out the depth you want to cut. The cleat on the bottom would be removed for this operation.
An index wheel was made to mount on the outboard of the headstock to track indexing of the wood. I marked this on with 12 positions because that is the number of index detents on my lathe. There is a turned wood pin on the back of the wheel to just friction fit into the shaft hole. PDF of the index wheel.
After the dados are cut and the filler pieces are cut they can be glued in. I ran glue along both sides of the dado then inserted the strips. If they were a little tight a small hammer was used to seat them firmly in place.