Lots of discussion has centered around the topic of adding embroidery to quilts --- and the main question is always "Do I make the entire quilt first and then add the embroidery, or do I embroider the pieces and then make the entire quilt?"
I prefer to embroider the individual pieces first, and then create the entire quilt. The embroidery process shrinks the pieces by pulling in on them. Your pieces should be embroidered first, and then cut to the proper size to accurately fit your quilt blocks.
In this example, the names of various boats and their owners were embroidered first on the red fabric. After pressing the pieces with a tiny bit of starch, I used them for the paper-piecing process on this quilt. This allowed me to use a tear-away/wash-away stabilizer that will add body to the lettering, but the bulk of the stabilizer (the part that was not under the lettering) will wash out of the quilt over time. Also, there will not be any bobbin thread from the embroidery showing on the back of the quilt.